The gold industry has been on an unprecedented trajectory in 2024, setting record after record and solidifying its status as a safe haven for investors amidst global uncertainty.
A Milestone Quarter: Over $100 Billion in Gold Demand
The third quarter of 2024 marked a historic milestone for the gold market. According to the latest Global Demand Trends report from the World Gold Council, the worldwide value of gold demand surged by 35% year-on-year, exceeding $100 billion for the first time.
This remarkable achievement was driven by a combination of rising physical demand in tonnes and record-breaking gold prices. Total gold demand rose by 5% to 1,313 tonnes, a Q3 record. Simultaneously, the average gold price for the quarter increased by 28% year-on-year to an all-time high of $2,474 per ounce.
Key Drivers Behind the Surge
The report highlights that investment flows played a pivotal role in gold’s stellar performance during Q3. Several factors contributed to the surge, including:
- Falling interest rates: Encouraging investors to turn to gold as a more attractive option.
- Geopolitical uncertainty: Heightening gold’s appeal as a stable asset.
- Portfolio diversification: Investors seeking balance in turbulent markets.
- Momentum buying: Driving demand higher.
Notably, global gold ETFs saw net inflows of 95 tonnes during the quarter, marking the first positive quarter since Q1 2022. This was a sharp reversal from the outflows of -139 tonnes recorded in Q3 2023.
Production Reaches New Heights
Gold producers have been ramping up output to capitalise on the booming market. In Q3 2024:
- Gold production increased by 6% year-on-year, reaching a new quarterly record.
- Total gold supply rose by 5% year-on-year to 1,313 tonnes.
This surge in supply underscores the industry’s ability to respond to heightened demand, ensuring ample availability for investors and central banks alike.
Looking Ahead: Gold’s Bright Future
Since the end of Q3 on 30 September, gold prices have continued their upward trajectory, surpassing $2,700 per ounce. Analysts at major financial institutions such as Bank of America and Citibank predict that gold prices could hit $3,000 per ounce by mid-2025.
The metal’s appeal remains strong due to:
- Macroeconomic and political uncertainty: Boosting its safe-haven status.
- Rising geopolitical tensions: Encouraging investors to hedge risks.
- Global debt concerns: Further cementing gold’s role as a reliable store of value.
Additionally, emerging market central banks continue to demonstrate robust demand for gold as they seek to diversify their reserves away from the US dollar.
2024: A Year to Remember for Gold
As the gold industry continues to break records, the third quarter of 2024 will go down as a defining moment. The combination of soaring prices, record demand, and strong production underscores gold’s enduring value and relevance in today’s economic landscape.
For investors and producers alike, gold’s “glittering” year is far from over, with the promise of more milestones to come.
