Demand for gold as an investment grows in 2024 – Everything you need to know

OTC demand continues to dominate the gold market, while interest in investments is beginning to shift according to the World Gold Council (WGC). Tavex has summarized everything you need to know about the latest trends in gold investments.

Changing demand for gold

The latest report from the World Gold Council shows that the demand for gold is changing. Jewelry demand is decreasing, while investments in bars and coins are increasing. Joseph Cavatoni from WGC says: “We see a shift from jewelry, which is primarily used for consumption, to saving in bars and coins.”

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Decreased jewelry demand

Record high gold prices have led to the global demand for gold jewelry dropping by 19% in the second quarter of 2023. This marked the lowest level in four years.

When prices rise, jewelry becomes more expensive, which means fewer people buy it. Additionally, economic uncertainty and changing consumer behaviors have also contributed to the decreased demand.

What does OTC mean?

OTC stands for “Over-The-Counter” and means that gold is bought and sold directly between two parties without going through an exchange. This trading often takes place through private negotiations, making it more flexible but also less transparent than exchange-traded transactions.

Increasing investment interest in gold

There has been a significant increase in investment interest from Western investors, among others, in both physical gold and gold-backed exchange-traded funds (ETFs). Cavatoni notes that European investors are leading this trend as a hedge against geopolitical uncertainty and lower interest rates.

Central Banks continue to buy gold

Although central bank gold purchases have decreased since the first quarter of 2024, they continue to be net buyers. According to Cavatoni, it is important to see the broader picture, as other countries like Poland and India are still buying large amounts of gold.

Growing use of gold in the technology sector

Demand for gold from the technology sector increased by 11% in the second quarter of 2024, primarily due to the use of gold in high-performance chips for AI and advanced computing.

What does the global gold supply look like?

Despite the changes in demand, the gold supply is stable, with a total growth of 4% compared to last year. Mine production reached record levels for the second quarter at 929 tons.

With these changes, we see how the gold market continues to evolve and adapt to global economic and political shifts.