Global Gold Demand Hits Record High in Third Quarter Amid Investor Interest and Price Surge

Global demand for gold surged to a new high in the third quarter of 2024, rising 5% year-on-year to 1,313 tonnes, according to the World Gold Council’s latest Gold Demand Trends report. This quarter marked the first time total demand exceeded $100 billion, buoyed by strong investment and a record-high price environment.

The report noted a dramatic increase in investment demand, which more than doubled from the previous year, reaching 364 tonnes. This spike was primarily driven by Western investors shifting towards gold exchange-traded funds (ETFs), with global gold ETFs adding 95 tonnes in Q3. This marked the first positive quarter for gold ETFs since early 2022. Although demand for bars and coins fell by 9%, total demand for these assets remains robust at 853 tonnes for the year to date—significantly above the 10-year average of 774 tonnes.

“Q3 saw increased investment and over-the-counter activity prop up global gold demand and drive price performance,” Louise Street, Senior Markets Analyst at the World Gold Council, commented. She highlighted the impact of a “fear of missing out” (FOMO) among investors, fueled by high gold prices and uncertainties including potential rate cuts, U.S. political tension, and ongoing conflicts in the Middle East.

Central bank purchases remained robust despite a slower pace in Q3, with 186 tonnes bought by central banks globally. Year-to-date central bank demand held steady at 694 tonnes, mirroring levels seen in the same period of 2022. However, the sustained increase in gold prices—averaging $2,474 per ounce this quarter—has led to a drop in demand for gold jewelry. Jewelry consumption dipped 12% year-on-year on a volume basis, though value-based sales rose by 13%, suggesting consumers are willing to pay more for smaller amounts of gold products amid higher prices.

In the technology sector, gold demand grew by 7%, largely supported by the electronics sector as the demand for artificial intelligence (AI)-driven applications continues to expand.

Gold supply increased in tandem with demand, growing 5% year-on-year, supported by a 3% rise in mine production and an 11% boost in recycling activities.

Street anticipates that the recent trend in gold investment flows may persist, potentially keeping demand and prices elevated. “Looking ahead, the step-change in gold investment flows is a trend that is likely to continue, which could keep both demand and price levels elevated,” she noted. However, she cautioned that the surge in gold prices—reaching over 30 record highs this year alone—may pose challenges for consumers. Yet, she added, the prospect of economic growth could also influence market dynamics in the months to come.