The demand for gold globally hit a record high last year, and it is expected to continue to surge in 2024, according to an industry body.
The World Gold Council made this projection by assuming that the Federal Reserve will move toward cutting interest rates, potentially aiding prices.
According to the report, overall gold demand globally grew by around 3 percent to 4,899 tonnes in 2023, primarily driven by strong demand in the over-the-counter market.
However, annual gold demand excluding OTC fell by 5 percent in 2023 to 4,448 tonnes.
The central bank buying spree also maintained momentum in 2023, with annual net purchases hitting 1,037 tonnes, just 45 tonnes below compared to 2022.
Louise Street, a senior market analyst at WGC, said: “Unwavering demand from central banks has been supportive of gold demand again this year and helped offset weakness in other areas of the market, keeping 2023 demand well above the 10-year moving average.”
He added: “In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand and in 2024 we expect this to have a pronounced impact on the market.”
Furthermore, Street pointed out that trade tensions and over 60 elections taking place around the world will also encourage investors to choose gold as a safe haven asset in 2024.
According to the report, bar and coin investment fell slightly by 3 percent year on year in 2023, while jewelry consumption inched up by 3 tonnes despite higher prices, supported by a rebound in Chinese demand.
Mine production was relatively flat in 2023, up 1 percent compared to 2023.
On the other hand, gold recycling increased by 9 percent, which was lower than expected, the report added.
In 2024, WGC expects total investment in gold to rise even higher.
Highlighting the positive outlook for 2024, Street said: “We know that central banks often cite gold’s performance in times of crisis as a reason to buy, which suggests demand from this sector will stay high this year and may help to offset a slowdown in consumer demand due to elevated gold prices and slowing economic growth.”