The World Gold Council’s latest Gold Demand Trends report for the second quarter of 2024 reveals that total gold demand including over-the-counter (OTC) investment reached 1,258 tonnes, a 4% year-on-year increase and the highest Q2 level since the data series began in 2000. The growth was primarily driven by sustained central bank purchases and strong OTC investment, although demand excluding OTC declined 6% YoY to 929 tonnes due to a sharp drop in jewelry consumption.
Central Bank Net Buying Rises 6% to 184 Tonnes
Central banks continued their aggressive gold accumulation in Q2, with net purchases totaling 184 tonnes, up 6% from the same period last year. The World Gold Council attributed this to portfolio protection and diversification needs. Despite record-high gold prices, central banks remained committed buyers, reinforcing gold’s strategic role in reserve management.
Jewelry Demand Plunges to Four-Year Low
Jewelry demand fell 19% YoY to 391 tonnes, the lowest for a second quarter since 2020. The decline was largely attributed to record gold prices averaging $2,338 per ounce in Q2, with a peak of $2,427 in May. High prices deterred consumer spending, especially in price-sensitive markets. In contrast, technology sector gold demand rose 11% YoY, driven by the booming AI industry, which increased use of gold in electronic components.
ETF Outflows and Bar & Coin Weakness
Global gold exchange-traded funds (ETFs) saw a net outflow of 7 tonnes during the quarter. Retail bar and coin investment also slipped 5% to 261 tonnes, mainly due to weak demand from Western markets. On the supply side, total gold supply grew 4% YoY to 1,258 tonnes. Mine production set a Q2 record at 929 tonnes, while recycling supply reached its highest Q2 level since 2012, reflecting higher gold prices.
The report concludes that while high prices weighed on jewelry and retail investment, central bank buying, AI-related technology demand, and OTC investment provided a solid foundation for gold demand, highlighting gold’s enduring appeal as a safe-haven asset in an uncertain economic environment.