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On 30 April, the World Gold Council released its Q1 2024 Global Gold Demand Trends Report. According to the report, global gold demand (including over-the-counter transactions) totalled 1,238t in Q1, up 3% y-o-y, the strongest Q1 performance in the past few years. After a period of volatility, the gold market has once again shown its unique attractiveness and stability.
Specifically, jewellery consumption, while down 2% y-o-y to 479t, remained above the Q1 average of 465t over the past five years. Meanwhile, total bar and coin demand reached 312.3t, demonstrating continued investor interest in gold as a safe-haven asset. The combination of continued global central bank purchases and solid investment demand from the over-the-counter market drove the average gold price to a record high of US$2,070 an ounce in the first quarter.
India's central bank, the Reserve Bank of India, added 19t to its gold reserves in the first quarter of this year, more than the 16t net bought in all of last year, according to data released by the World Gold Council. However, with the gold price rising, the World Gold Council predicts that India's total gold demand in 2024 could fall to a four-year low.
Sachin Jain, chief executive of the World Gold Council's India operations, said India's gold demand could be between 700t and 800t this year. If the price of gold continues to rise, demand is likely to fall at the low end of this range. In fact, India's gold consumption has fallen by 1.7% y-o-y to 761t in 2023.
Reuters reported that India's domestic gold price hit a new high in April, reaching 73,958 rupees (about 6,413 yuan) per 10 grams of gold bars. The Indian gold price has risen by more than 13% so far this year and by more than 10% in 2023. The continued rise in the price of gold has led to a demand for investment gold outpacing jewellery gold, with investment gold accounting for three-quarters of the total demand.
As an ancient and timeless precious metal, gold has always been a symbol of wealth, a substitute for money, and one of the best choices for investment. Its unique physicochemical properties make it less susceptible to corrosion, easy to process and preserve, and thus highly recognized and valued worldwide. Whether worn as jewelry, as a reserve currency to hold value, or as part of an investment portfolio, gold attracts attention with its unique charm and stability.
China and India are the world's largest consumers of gold jewellery
Gold demand in 2022 was the strongest growth in recent years, with global demand surging 18% to 4,740.7t. China and India are the world's two largest consumers of gold jewellery, each accounting for about 32% of global jewellery demand in 2022, as residents of both countries have a traditional need to buy gold during festivals, weddings and other occasions, and gold jewellery can meet the need for stored value.
In 2021, China and India together accounted for more than 60% of consumption
In 2021, China and India both had more than 600 tonnes of gold jewellery consumption, accounting for more than 60% of global gold jewellery consumption demand in 2021. The United States is the world's third-largest consumer of gold jewellery, accounting for about 7% of the total consumption of gold jewellery in 2021 at 149 tonnes.
Global Gold Supply: Reserves volatility declined
The main supply of gold comes from mineral gold, and the rest comes from recycled gold. According to the United States Geological Survey (USGS), global gold reserves have fluctuated in recent years, falling to 52,000 tonnes by the end of 2022.
When analyzing the subsequent trend of international gold prices, most analysts believe that in view of the current global economic uncertainty and geopolitical instability, gold as a safe-haven asset will remain high and is expected to rise further. Huatai Securities specifically pointed out that the global central bank's allocation position to gold has strengthened, and the accumulation of this positive factor may prompt gold prices to break through the $3,000 / ounce mark in the future. In fact, from the perspective of gold demand from 2022 to 2023, the central bank's large-scale gold purchase demand has gradually replaced the investment demand of gold ETFs and physical gold, and has become the main force driving the price of gold in the interest rate hike cycle.
Note: This article is for content purposes only and does not constitute any investment advice.
Prospective Economist APP Information Group
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