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Gold demand hits Q2 record as price maintains glittering surge to new peaks

Gold demand hits Q2 record as price maintains glittering surge to new peaks
*Data as of 30 June 2024. Source: ICE Benchmark Administration, Metals Focus, Refinitiv GFMS, World Gold Council
Ed Stoddard
By Ed Stoddard
30 Jul 2024
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Global demand for gold scaled new highs for the second quarter (Q2) of a calendar year in 2024, underpinning the precious metal’s run to record-high prices.

The gold price remains on an absolute tear, scaling new highs this year as central banks diversify their reserve holdings and investors seek safe havens amid rising geopolitical tensions and uncertainty.

According to data compiled by the World Gold Council, the precious metal hit a record high of $2,480.25 an ounce on 17 July, and it remains within spitting distance of that peak. 

The council’s latest quarterly Gold Demand Trends report shows global gold demand rose 4% year-on-year in Q2 2024 to 1,258 tonnes, a Q2 record in its data series since 2000. The gold price averaged $2,338 an ounce during the quarter, which ended 30 June, 18% higher year-on-year. 

Key drivers


The key drivers were central bank demand, which declined from Q1 but rose 6% year-on-year to 183 tonnes. 

Central banks, notably those in emerging markets, have been on a gold-buying binge in a diversification drive away from dependence on the US dollar as a reserve currency. 

An employee about 3km underground at the South Deep Gold mine on 12 October 2022, located west of Johannesburg in Gauteng. It is the second-biggest gold mine in the world. (Photo:Felix Dlangamandla/Daily Maverick)



“Our annual central bank survey confirmed that reserve managers believe gold allocations will continue to rise over the next 12 months, driven by the need for portfolio protection and diversification in a complex economic and geopolitical environment,” the World Gold Council said. 

The big jump was in over-the-counter transactions, which surged 53% year-on-year to 329 tonnes. Over-the-counter transactions are directly between parties outside of a centralised exchange network, and this trend suggests there is a pool of both retail and institutional investors who currently see value in gold, even at its elevated prices. 

“The over-the-counter transactions market has seen continued appetite for gold from institutional and high-net-worth investors, as well as family offices, as they turn to gold for portfolio diversification,” said Louise Street, Senior Markets Analyst at the World Gold Council.

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The flip side of this coin is that demand for gold from the jewellery sector is slumping in the face of record prices, falling 19% year-on-year to a four-year low of 39 tonnes. This also mirrors trends in the natural diamond sector, which is struggling.

*Data as of 30 June 2024. Source: ICE Benchmark Administration, Metals Focus, Refinitiv GFMS, World Gold Council



On another front, demand for gold for industrial use rose 11% year-on-year because of its application in AI technology. 

Mine production also posted a Q2 record of 929 tonnes, up 4% higher year-on-year, as gold producers ramp up output to take advantage of scorching prices. 

And there are still plenty of red flags to incite gold bulls. Rising prospects of a US rate cut in September are undermining the US dollar, which is another boost to gold. How long this can be sustained is anyone’s guess – a boom can be followed by a bust. 

But with gold’s price already reaching a record high this quarter, Q3 also looks set to glitter. DM

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