Share
Home Sector Markets Central banks, investors drive gold demand to new record in 2024

Central banks, investors drive gold demand to new record in 2024

Annual gold investment reached a four-year high of 1,180 tons, rising 25 percent year-on-year
Central banks, investors drive gold demand to new record in 2024
In the Middle East, gold investment demand fell slightly short of the record level set in 2023, but remained very strong on a historical basis

Total gold demand rose 1 percent annually in Q4 of 2024, reaching a new quarterly high and contributing to a record annual total of 4,974 tons. Central bank buying surged last year, exceeding 1,000 tons for the third year in a row and accelerating sharply in Q4 to 333 tons.

Gold prices performed exceptionally well in 2024, outperforming all major asset classes and proving to be a strong portfolio diversifier. Gold rose 25.5 percent in 2024 due to its role as an effective hedge against the heightened geopolitical uncertainty and market volatility experienced this year.

The surge in gold prices can be attributed to several factors including strong investor demand, which offset declining consumer demand. Heightened geopolitical risk due to increased conflicts, along with a busy electoral year across the world further supported this surge. Periods of opportunity costs when markets saw lower yields and a weakening U.S. dollar also were supportive of the rise in gold prices last year.

Gold investments hit four-year high

In its latest quarterly report, the World Gold Council noted that annual investment reached a four-year high of 1,180 tons, rising 25 percent year-on-year. This growth was concentrated in the second half of the year as rate cuts, geopolitical uncertainty and gold’s price performance attracted inflows into gold ETFs.

Another major factor driving gold demand in 2024 was Gold ETFs, with 2024 marking the first year since 2020 in which holdings were essentially unchanged, in contrast to the heavy outflows of the prior three years. Heightened geopolitical uncertainties, shifting expectations of the future path of interest rates, and the strongest annual gold price performance since 2010 were all key drivers of the annual increase.

Bar and coin demand remains unchanged

In addition, bar and coin demand was in line with 2023 at 1,186 tons. The composition shifted as bar investment grew and coin buying declined. The World Gold Council also revealed that annual technology demand grew by 21 tons in 2024, largely driven by continued growth in AI adoption.

However, gold jewelry was the clear outlier. Annual consumption hit a new low at 1,877 tons as consumers could only afford to buy in lower quantities. Nonetheless, spending on gold jewelry jumped 9 percent to $144 billion, driven by a major surge in gold prices last year.

Gold demand
Source: ICE Benchmark Administration, Metals Focus, World Gold Council

Middle East demand strong

In the Middle East, gold investment demand fell slightly short of the record level set in 2023, but remained very strong on a historical basis. The annual demand of 110 tons was the third highest in the World Gold Council’s data series.

In the fourth quarter, investors across the region were universal in their response to the gold price dip in November, using it as an opportunity to add to/build gold holdings in expectation of a return to the strong upward trend.

Gold jewelry demand was universally lower across the Middle East in 2024 due to the rise in gold prices and the Q3 Indian gold import duty cut. The latter hit demand among Indian tourists as it reduced the price advantage of buying gold abroad rather than at home. The UAE was particularly affected by this, given the importance of Indian tourists to that market.

Central banks to continue driving demand in 2025

The World Gold Council expects central banks to stay in the driving seat and gold ETF investors to join the fray. However, jewelry demand will remain under pressure and the market may see further growth in recycling. Mine supply is also expected to remain robust.

Having positively surprised markets for three years in a row, evidence supports the idea that central banks can repeat their 1,000 ton-plus net buying in 2025.

The World Gold Council says that armed conflict and global trade and economic conflict may support the central bank’s net buying trend. Central banks have taken advantage of temporary pullbacks in the gold price as entry points, while sales remained limited and mostly tactical as the price rose.

Read: UAE gold prices climb AED2.75, global rates hit record high as investors seek safe-haven amid tariff conflict

National Bank of Poland largest gold buyer in 2024

Gold has long proven to be a beacon of financial confidence and stability for central banks. The National Bank of Poland (NBP) was the largest gold buyer in 2024, adding a further 90 tons to its gold reserves. The bank’s President, Adam Glapiński, has been a vocal proponent of owning gold and has previously been open about raising the NBP’s gold allocation to 20 percent of total reserves.

Central banks have been net buyers for the last 15 years. Following massive buying in 2022 and 2023, net purchases in 2024 surpassed market expectations. Geopolitical and economic uncertainty remains high in 2025 and it seems as likely as ever that central banks will once again turn to gold as a stable strategic asset.

“We see tailwinds for gold ETF, OTC and futures-based investment stemming from generally lower interest rates, richly valued equities, a softer US dollar and geopolitical risk mostly expressed though trade and economic uncertainty,” the report added.

The stories on our website are intended for informational purposes only. Those with finance, investment, tax or legal content are not to be taken as financial advice or recommendation. Refer to our full disclaimer policy here.