The average price of gold in 2024 was $2,386/oz, a 23% increase over the $1,941/oz average in 2023. $2,386/oz now represents the highest annual average price on record, exceeding the previous high reached in 2023. It was the ninth straight year of annual average gold price increases.
2024 marked another year of global economic challenges, led by persistent inflation, macroeconomic uncertainty, and geopolitical concerns. Through these continued challenges, gold has cemented its place as a safe haven investment and store of value. The gold price at the end of 2024 was $2,609/oz, above the annual average for the year, and has continued to trade strongly and reach new highs in the early months of 2025.
After 2020’s historically low global nominal interest rates, including a benchmark rate range of 0% to 0.25% in the United States to help counteract the negative economic impact of the Covid-19 pandemic, benchmark interest rates were raised substantially during 2022 and 2023 to manage inflation. Rising benchmark interest rates in those years ultimately led to a reduction in inflation from long-term highs. This moderation in inflation during 2024 allowed for long-awaited cuts to benchmark interest rates in the United States in the second half of the year. When combined with geopolitical tensions, uncertainty regarding global growth, and elevated equity prices, the gold price traded to an all-time high of $2,790/oz in the fourth quarter of 2024.
Demand for gold remained strong in 2024, with the World Gold Council reporting total demand of 4,975 tonnes, up modestly from the prior year, reflecting continued elevated levels of net purchases from global central banks slightly tempered by declines in jewellery fabrication. When accounting for the rising prices, overall gold demand in 2024 in US dollar terms reached an all-time high.
The World Gold Council reported that collective ETF gold holdings decreased by 7 tonnes during the year, a significant slowing of outflows compared to the decrease of 244 tonnes in the prior year. Bar and coin demand in 2024 was largely consistent with the prior year.
Central bank purchases continued at an impressive pace during 2024, exceeding 1,000 tonnes for the third consecutive year. 2022, 2023 and 2024 have represented the three highest levels of net purchases in over 50 years. The World Gold Council estimates that global central banks added a net of 1,045 tonnes to their reserves during 2024, the fifteenth consecutive year of net purchases
During the worst impacts of the Covid-19 pandemic, some central banks looked to their holdings of gold as a source of liquidity in difficult economic times. Their ability to do so provided a strong statement as to why gold is a valuable reserve asset and a key source of reserve diversification. The strong level of purchases in the following years has shown that central banks view gold positively and as a long-term store of value.
Global jewellery consumption decreased in 2024 on the back of record high gold prices, with the decrease being led by a 24% decline in Chinese consumption. Despite higher prices and a weakening currency, Indian demand only fell by 2% year-over-year, highlighting the country’s enduring affinity for gold. As a result, India regained the mantle as the country with the highest level of gold jewellery consumption. On a combined basis, India and China represented approximately 56% of global gold jewellery demand in 2024, down slightly from 57% in the prior year. Gold demand for technology, electronics and other industrial uses rose by 7% in 2024, due in part to a demand for gold for use in AI-related applications.
The overall annual supply of gold in 2024 increased by 1% due mainly to an increase in recycled gold as a result of higher prices. The supply of recycled gold increased by 11% but was still approximately 16% lower than the all-time high reached in 2012, despite record high gold prices.
Global mine production is estimated to have risen modestly for the fourth year in a row, reaching a new annual high. However, the small year-over-year increase highlights the mining industry’s difficulty in increasing production despite the ninth straight year of record high annual average prices. As gold prices have increased and capital has become more readily available in recent years, there is continued evidence of increased spending on exploration. However, the costs of mine construction and the time required for environmental studies and permitting activities before reaching the production stage means that a return to sustained global production growth remains a challenge.