Last year, global gold trading volume, transaction value, and average trading prices all hit record highs. This surge was driven by heightened geopolitical uncertainties, such as conflicts in the Middle East and the war in Ukraine, which intensified the preference for safe-haven assets. Market analysts predict that the demand for gold and its price will continue to rise as the tariff wars initiated by President Donald Trump escalate.

According to the "2024 Gold Demand Trends" report recently published by the World Gold Council (WGC), global gold trading volume (including over-the-counter transactions) reached a record 4,974 tons last year. The fourth quarter of last year also saw a 1% increase compared to the same period the previous year, setting a new quarterly record.

Last year was marked by a series of gold price records. Based on the afternoon fixing price of the London Bullion Market, gold prices hit all-time highs 40 times in just one year. The average price in the fourth quarter of last year was $2,663 per ounce, a historic high, while the annual average price also reached a record $2,386 per ounce. The annual average price surged by 23% compared to the previous year. Global total transaction value amounted to $111 billion in the fourth quarter alone and $382 billion for the entire year, both record highs. Gold investment also rose by 25% year-on-year to 1,180 tons, the highest level in four years.

Notably, investments in gold-backed exchange-traded funds (ETFs) saw significant growth. SPDR Gold Shares (GLD) surged by 39.71% over the past year, while iShares Gold Trust (IAU) rose by 39.90% during the same period. A jeweler in Koreatown explained, "While there isn't aggressive buying due to the poor economic conditions among Koreans, there is considerable demand for selling gold holdings." A Korean resident, Mr. Choi, shared, "I've been closely watching gold prices as they kept hitting new highs. Buying and selling physical gold bars felt burdensome, so I invested in gold ETFs, which have yielded solid returns."

The unprecedented gold rush is attributed to central banks worldwide treating gold as the ultimate safe-haven asset and continuing their purchases. After Russia's invasion of Ukraine led to the freezing of dollar assets, emerging markets became increasingly wary of holding dollars and the risks of sanctions, leading to a shift toward gold, a stateless currency.

Last year, net purchases by central banks and the International Monetary Fund (IMF) decreased by 6 tons (1%) compared to the previous year but still totaled 1,045 tons, marking the third consecutive year of exceeding 1,000 tons. This purchasing trend is nearly double the average from 2010 to 2023 (around 550 tons). As of November last year, Poland was the largest buyer (90 tons), followed by Turkey (75 tons) and India (73 tons).

Experts predict that gold prices will continue to rally this year. With ongoing geopolitical uncertainties and President Trump's tariff wars against Mexico, Canada, and China, the preference for safe-haven assets is expected to strengthen further. Major investment banks like JPMorgan, Goldman Sachs, and Citigroup have already set their gold price target at $3,000 per ounce for this year.

The World Gold Council emphasized, "Gold will continue to serve as a hedge against various economic uncertainties this year, with central banks and ETF investors leading the way."



<Hongyong Park>