New Delhi: Gold prices in India surged to an all-time high on Wednesday, touching Rs 8432 per gram, marking a significant rise compared to February 4 rates. Reportedly, prices have soared to new heights amid a global surge in gold demand driven by central bank purchases and strong investor interest.
The World Gold Council (WGC) in its latest report on Gold Demand Trends revealed that strong and sustained central bank buying and growth in investment demand pushed global gold demand, including over-the-counter purchases, to a record high of 4974 tonnes in 2024, resulting in the total value hitting $382 billion.
As per official reports, for the third consecutive year, the central banks' purchases exceeded 1000 tonnes as buying ramped up significantly in the Q4, bringing the annual total for central banks to 1045 tonnes.
WGC further mentioned that global investment demand increased 25% year-on-year to a four-year-high 1180 tonnes, driven by a revival in gold Exchange Traded Funds (ETFs) demand in the second half of 2024. Global gold ETFs added 19 tonnes in Q4 2024, marking two consecutive quarters of inflows for the asset class. Bar and coin demand stayed largely in line with 2023 volumes at 1186 tonnes in 2024," the report stated.
While the soaring prices dampened demand in the jewellery sector across the globe, India’s gold demand remained resilient in 2024, dropping by only 2% compared to 2023, whereas China saw a 24% decline.
Latest reports suggest that India surpassed China to become the world's largest consumer of gold jewellery in 2024. The jewellery consumption in India reportedly stood at 563.4 tonnes, while that of China it was 511.4 tonnes.
What Expert Said
“Gold once again dominated headlines, with prices reaching 40 record highs in 2024. Yet, the demand trajectory of 2024 was far from linear, with central banks posting strong demand in Q1 before moderating through the middle of the year and finishing with a strong Q4," said Louise Street, Senior Markets Analyst at the WGC.
"Similarly, the second half of 2024 saw a notable resurgence from Western investors which, combined with remarkable growth in Asian flows, brought global gold ETF flows into positive territory in the third and fourth quarters. This was fueled by the start of rate cutting cycles by many central banks and heightened global uncertainties, including the US presidential election and escalating tensions in the Middle East," he commented.
What To Expect In 2025
In 2025, central banks will likely remain in the driving seat and gold ETF investors will join the fray, especially if we see lower, albeit volatile interest rates, the expert said.
On the other hand, jewellery weakness would continue with high gold prices and soft economic growth squeezing the consumers' spending power. Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk, Louise opined.
In Delhi, 24-carat gold was priced at Rs 85,383 per 10 grams on Wednesday, while in Chennai, it was Rs 85,231 per 10 grams. In Mumbai and Kolkata, gold price stood at Rs 85,237 and Rs 85,235 per 10 grams, respectively.
Experts are of the view that the price surge is due to increased demand after China responded to US tariffs, which were initially imposed by President Donald Trump on China.
