According to the Gold Demand Trends report by the World Gold Council (WGC), global gold consumption increased 3% in the first quarter of 2024 to 1,238 tonnes, marking it as the strongest first quarter since 2016.
The demand was supported by healthy over-the-counter (OTC) investment buying. Excluding OTC, it slipped 5% year-on-year to 1,102 tonnes due to continued ETF outflows.
Persistent central bank buying and higher demand from Asian buyers helped drive the gold price to a record quarterly average of $2,070 per ounce, which is 10% higher year-on-year and 5% higher quarter-on-quarter.
Bar and coin demand matched the previous quarter at 312 tonnes, translating to a 3% year-on-year increase, while net central bank gold buying amounted to 290 tonnes. Global gold ETF holdings fell by 114t due to quarterly outflows in Europe and North America as compared to inflows into Asian-listed funds. China generated the bulk of that increase, with renewed investor interest in gold due to the weakening local currency and poorly performing domestic equity markets.
In terms of supply, it reached a record first quarter level of 893 tonnes, while recycling jumped 12% year-on-year to 351 tonnes due to a sizeable increase in gold price in late 2023 and early 2024.
“A number of factors are behind the recent surge including heightened geopolitical risk and ongoing macroeconomic uncertainty driving safe-haven demand for gold. In addition, the continued and resolute demand from central banks, strong OTC investment and increased net buying in the derivatives market, have all contributed to the higher price of gold,” said Louise Street, WGC Senior Markets Analyst.
“Looking ahead, 2024 is likely to produce a much stronger return for gold than we anticipated at the beginning of the year, based on its recent performance. Should the price level off in the coming months, some price-sensitive buyers may re-enter the market and investors will continue to look to gold for a safe haven asset as they seek clarity around rate cuts and election results.”
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
