Global Gold Demand Soars Beyond $100 Billion Record
Global Demand for Gold Surpasses $100 Billion Record
According to the latest report by the World Gold Council for the third quarter of 2024, global demand for gold has broken all previous records, surpassing the $100 billion mark for the first time. The report indicates that gold demand increased by five percent year-on-year, totaling 1,313 tons. This third-quarter demand sets a new peak in the precious metals market.
Why has gold demand increased so significantly?
The World Gold Council attributes the rise in gold demand to strong investor interest and high price levels. Current geopolitical tensions, global economic uncertainties, and inflationary fears have collectively directed investors' attention towards gold as a secure investment form. Despite high prices, investors perceive gold as offering stability, especially in volatile markets where other investments might be risky.
Investor interest: More than a twofold increase
Investor demand for gold has more than doubled compared to the previous year, unaffected by high prices. Many investors, particularly institutional ones, have opened new portfolios in gold, with its risk-hedging function appealing to an increasing number of people. The World Gold Council's data shows that demand has risen not only due to high prices but also in response to various geopolitical developments and financial uncertainties.
Gold prices: Record highs
In the current economic environment, gold prices have also been reaching historical peaks. The price increase in the precious metals market is driven by traditional investment tools, such as stocks, becoming riskier, alongside inflation and rising interest rates further boosting demand. For investors, gold serves as a safe haven, offering reliable long-term value retention.
Role of central banks
Central banks worldwide have also increased their gold reserves, contributing to rising prices. In several countries, like the United Arab Emirates and China, central banks have amassed larger gold reserves to maintain the stability of foreign exchange reserves. This trend is expected to continue as central banks aim to ensure economic stability against fluctuations in the dollar and other currencies.
Geographic distribution of gold demand
The increase in gold demand has not been evenly distributed globally. Asian markets, particularly China and India, remain the largest consumers of gold due to its strong cultural significance and its use in preserving family wealth. Additionally, demand has risen in North America and Europe, where investors seek to protect themselves from inflation by investing in gold.
What to expect in the next quarter?
According to World Gold Council forecasts, gold demand is expected to remain high, especially if global economic uncertainties persist. The growth in gold demand is unlikely to slow down, as investors continue to choose this precious metal for value preservation and security. However, price volatility could pose challenges, with speculative trading for short-term gains potentially increasing volatility.
Summary
The $100 billion total value reached in the third quarter of 2024 indicates that global demand for gold has risen to new heights. The World Gold Council's report highlights that continuous investor and central bank interest, high prices, and economic uncertainties collectively contributed to record demand. Gold continues to play a prominent role in financial markets and is expected to maintain its significance in the upcoming quarters.
