There is an overall inverse relationship between the price of gold and the demand for gold jewellery. Despite the high gold prices, the demand for gold jewellery has remained relatively stable in recent years, particularly when compared to the pandemic year of 2020, although it is generally lower than the peaks seen in the late 1990s and early 2000s. In 2023, annual jewellery consumption held steady at 2,093 tons, representing 47% of the global demand of 4,448 tons (ex-OTC), even in a very high gold price environment.

This indicates strong consumer purchasing power and a persistently high demand for gold jewellery. However, the question remains: will this demand continue in 2024 with gold prices climbing even higher, over $2,500 per ounce? 

It could negatively impact demand if gold prices remain at such a high level or increase further. At the same time, if global economies continue to recover from the disruptions caused by the COVID-19 pandemic and Russia-Ukraine conflict, increased consumer confidence and spending could support steady or even rising demand for gold jewellery.

Central Banks: China, Poland and Singapore

Central banks are among the most influential buyers of gold, accounting for about 25% of total demand. Central banks globally have been net buyers of gold since 2010,...

The largest buyer in 2023 is China, far surpassing other countries, followed by Poland and Singapore. China’s large purchases are likely motivated by a desire to reduce reliance on the US dollar and diversify its reserves as tensions with the West continue, while countries like Kazakhstan might sell gold to address economic challenges.

Following these record numbers, gold continues to be viewed favourably by central banks as a reserve asset. It raises the question again: will this continue in 2024 and beyond?

The trend of central banks purchasing large amounts of gold could significantly impact gold prices. According to the 2024 Central Bank Gold Reserves (CBGR) survey, which was conducted between 19 February and 30 April 2024 with...

In 2023, total annual gold investment sank to a 10-year low of 945t. This can be related to the profit-taking activities after the sharp rise in gold prices in 2020. Or we are seeing an emerging asset, which serves as an alternative?

In 2023, Global gold ETFs saw a third consecutive annual outflow, losing 244t, led by Europe.

However, the steep drop in European gold investment in 2023 was, to a large degree, countered by strength in China (28% y/y). Also, a blistering central bank buying, together with resilient jewellery consumption, offset sizable ETF outflows.

Tonnes	2022	2023	Y/Y change
The total gold demand has been stable from 2010 to 2019 at 4,500t, but it has been increasing since the pandemic in 2019, with a 5% (excluding OTC) in 2023 compared to 2022 which is a very strong year. But inclusive of significant OTC and stock flows (450t), total gold demand in 2023 was the highest on record at 4,899t, reflecting strong demand overall in 2023. Additionally, China (including the Chinese government, Chinese investors and Chinese jewellery consumers) is the most active player in the global gold market, with significant contributions in jewellery, investment and... Gold remains a vital asset in the global economy, with its demand and supply dynamics influenced by a complex interplay of factors. From individual investors to central banks, the demand for gold is driven by its unique role as a store of value, a hedge against inflation, and a safe-haven asset. While elevated gold prices may dampen demand in the jewellery sector, this could be offset by ongoing economic recovery, especially in countries like China. Central banks’ plans to increase gold reserves are likely to provide strong support for prices. ETF flows, which have... Subscribe Subscribe to our pro research to download the PDF Monthly Leap into new horizons with our Pro research. HK$ 88 / month Yearly Leap into new horizons with our Pro research. HK$ 888 / year Save 16% compared to monthly plan! Comments (0) Sign in or create a free account to leave a comment.