Geopolitical and macroeconomic uncertainties are likely to be a recurring theme this year, increasing demand for gold as a store of wealth and hedge against risk, according to the World Gold Council.
Gold demand could increase in 2025 - Photo: WGC
Global gold demand in 2024 to hit record high
The World Gold Council (WGC)'s Gold Demand Trends for Q4 and Full Year 2024 report just released shows that total annual gold demand (including over-the-counter (OTC) transactions) reached a new record high of 4,974 tonnes, driven by increased investment demand and continued strong and sustained central bank buying.
The combination of record high gold prices and trading volumes has pushed total gold demand to an all-time high of $382 billion.
The WGC said central banks continued to buy gold at a rapid pace in 2024, exceeding 1,000 tonnes for the third consecutive year. Purchases increased significantly in the fourth quarter, reaching 333 tonnes, bringing the total annual central bank purchases to 1,045 tonnes.
Global gold investment demand will rise 25% year-on-year in 2023 to 1,180 tonnes - a four-year high - driven by a revival in demand for gold exchange-traded funds (ETFs) in the second half of 2024, according to a report from the WGC.
Global ETFs added 19 tonnes of gold in Q4 2024, marking two consecutive quarters of inflows into gold. Demand for gold bars and coins remained at levels similar to 2023 volumes, reaching 1,186 tonnes in 2024.
The report also pointed out that in 2024, markets in the ASEAN region will witness annual growth in gold investment demand.
In Q4, Vietnam bucked the regional trend with a 14% year-on-year decline in 2023, as supply shortages limited investors’ ability to buy gold bars and led to higher price premiums.
“In this context, some investors have turned to buying gold rings. Although gold rings are classified as jewelry, these plain gold rings are often used as investment assets,” the WGC said.
What will gold demand be like this year?
"The strength of gold prices has impacted jewelry demand in 2024," said Shaokai Fan, regional director for Asia-Pacific (excluding China) and director of global central banks at the World Gold Council.
Mr Shaokai Fan said it was “not surprising” that high gold prices had dampened demand for gold jewellery, with annual consumption falling 11% to 1,877 tonnes.
Louise Street, senior market analyst at the World Gold Council, said gold was once again a hot topic in 2024, with prices hitting record highs last year. However, demand for gold in 2024 will not increase or decrease steadily, but will fluctuate with many different fluctuations.
Specifically, central banks recorded strong demand in the first quarter before tapering off in mid-year and rising again in the fourth quarter.
Similarly, in the second half of 2024, Western investors returned to gold investment strongly, along with a sharp increase in gold investment inflows from Asia, bringing global gold ETF inflows back to positive levels in Q3 and Q4.
This is due to the start of interest rate cutting cycles by many central banks and increased geopolitical uncertainty globally, including the US presidential election and escalating tensions in the Middle East, according to Ms. Louise Street.
“In 2025, we expect central banks to continue to play a leading role and gold ETF investors to actively participate in the gold market, especially as interest rates fall, but volatility remains.
On the other hand, gold jewelry is likely to continue to decline as high gold prices and weak economic growth reduce consumers' purchasing power. Geopolitical and macroeconomic instability are likely to be a recurring situation this year and increase demand for gold as a store of wealth and hedge against risks," WGC experts forecast.
Source: https://tuoitre.vn/chuyen-gia-hoi-dong-vang-the-gioi-chi-ly-do-khien-du-bao-nhu-cau-vang-tang-nam-nay-20250205162147797.htm
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