Global demand for gold
The global demand for gold remains robust due to its historical significance, financial stability, and appeal as a safe haven asset. During times of economic uncertainty, investors often turn to gold as a resilient investment option. Recent economic uncertainties and geopolitical tensions have further highlighted gold's attractiveness as a safe haven.
Given the promising outlook for the industry, investors may consider purchasing fundamentally strong gold stocks such as Agnico Eagle Mines Limited (AEM), Barrick Gold Corporation (GOLD), and Kinross Gold Corporation (KGC) for potential upside.
Amid persistent inflation levels and market downturns, gold continues to be sought after as a reliable hedge. In 2024, gold has shown strong performance, outpacing various asset classes with a 12% year-to-date growth. This growth is supported by ongoing central bank purchases, Asian investment inflows, resilient consumer demand, and geopolitical uncertainties.
Despite challenges such as a stronger dollar and higher bond yields, gold prices have recently risen. Investors are closely monitoring U.S. economic indicators, including June inflation data and expectations around interest rates. As of 14:35 p.m. on Tuesday, spot gold increased by 0.2% to $2,363.64 per ounce, while U.S. gold futures settled approximately 0.2% higher at $2,367.90.
Bank of America Corporation analysts have projected that gold could potentially rise to $3,000 per ounce within the next 12-18 months. This bullish outlook is driven by gold's role as a long-term asset, its effectiveness as a hedge against inflation, and its ability to diversify investment portfolios.
In terms of gold demand, the jewellery industry dominated the market, accounting for a 48.7% share of global gold demand in the previous year, equivalent to approximately 2,168 metric tons. Following the jewellery sector, demand came from investments, central bank reserves, and technological applications.
Global gold production in 2023 amounted to approximately 3,000 metric tons.