The appetite of the global central banks of gold does not appear any signs of decline, even as the gold industry comes out of a record year from the demand for precious metal, according to the World Gold Council.
The council said today, Wednesday, in the report of the order of demand for gold: “The geopolitical and economic uncertainty remains high in 2025, and it seems more likely than ever before the central banks resort to gold as a strategic asset.”
Expectations come after the Council highlighted the highest level ever in the annual demand last year, as the central banks continued to “collect gold at an amazing pace”. As for gold jewelry, the situation was anomalous, as the demand decreased due to high prices.
The order is issued
In its report, the Council expected that the central banks will continue to lead the demand for gold with more demand from investment fund investors, noting that the demand for jewelry will remain under pressure and we may witness more growth in recycling. The offer is expected to remain strong.
According to the report, central banks bought 1045 metric tons of gold last year, at a value of approximately 96 billion dollars at the prices of Tuesday, and Poland, India and Turkey were the largest buyers, while central banks were a net buyer for 15 years, but the annual pace of purchases have doubled almost since the war erupted in Ukraine, as the authorities have sought to restore balance to reserves away from the dollar.
“The major surprise on the demand side is the fact that central banks bought a thousand tons last year. There were wide -ranging purchases by central banks, and more than we expected at the beginning of the year,” said John Reed.
2024 performance
Gold prices increased by 27% over the past year with investors searching for a safe haven from conflicts in Ukraine and the Middle East, and the central banks turned to reduce interest rates, and the total demand for gold increased by 1% to a record annual level of 4974 tons last year, according to. For the report.
The high prices reduced the consumption of jewelry, which decreased by 11% to 1877 tons, and China contributed to most of the decrease, as the demand for jewelry fell to second place after India for the second time in 3 years. The demand for alloys and gold coins has also increased by the technical sectors, especially in electronics and advanced technology.
“China remains the largest gold market – it is clear that the demand for jewelry has decreased a lot, but the investment demand has increased. The ratio can be used almost between the two as a raw scale of economic morale inside China,” Bloomberg quoted Reed as saying.
According to the report, investor morale may improve if the Chinese People’s Bank continues to announce gold purchases, and the motives for purchase of central banks tend to be more strategic (longer) than other investors, and sales have been relatively rare in the past 15 years, and as a result these tend to Institutions to be less interactive with price movements, providing an important pillar to support alloys, according to Bloomberg.
