Demand for Gold as an Investment Set to Grow in 2024

Recent Trends in the Gold Market

According to the World Gold Council (WGC), investment interest is changing even while demand for over-the-counter (OTC) gold transactions is still robust. At Tavex, we have assembled an important analysis on the newest gold investment trends.

Evolving Gold Demand

The WGC’s latest report indicates a notable shift in gold demand. While the appetite for jewelry is waning, there is a growing interest in investing in gold bars and coins.

Joseph Cavatoni from the WGC notes,

“We are observing a transition from gold jewelry, which is predominantly consumed, to savings in the form of bars and coins.”

Reduced Jewelry Demand

The worldwide demand for gold jewellery dropped by 19% in the second quarter of 2023, thus lowest level in four years. Record-high gold prices are mostly responsible for this decline; so, jewellery is less appealing to consumers and more expensive. Further adding to this drop are shifting consumer behaviour and economic uncertainties in the long term.

Understanding OTC Transactions

OTC, sometimes known as “Over-The-Counter,” is the direct buying and selling of gold between two individuals free from exchange’s involvement. Often carried out through private discussions, this kind of trading gives greater freedom but less openness than exchange-traded deals..

Rising Investment Interest

There has been a significant uptick in investment interest and increased demand, particularly among Western investors, in both physical gold bullion and gold-backed exchange-traded funds (ETFs).

European investors are at the forefront of this trend, using gold as a hedge against geopolitical uncertainties and low interest rates

Central Bank Gold Purchases

Though central banks’ gold buying slow-down since the first quarter of 2024, they still net buyers. Cavatoni emphasises the need of considering the larger background since nations like Poland and India are purchasing significant volumes of gold.

Increasing Use of Gold in Technology

Global demand for gold in the technology sector rose by 11% in the second quarter of 2024, driven primarily by its use in high-performance chips for artificial intelligence and advanced computing.

Global Supply of Gold

The global gold supply remains stable despite variations in demand with a 4% increase throughout the year. Mining output in the second quarter topped 929 tonnes, a new high. The balance between the supply and demand is an important element to keep an eye on.

These trends reveal how the gold market responds to political and economic events occurring all around by constantly shifting and altering. Buying gold has many advantages, with everyone having their personal preferences of how they would like to invest.