LONDON: Gold demand will win a “pronounced” boost from geopolitical uncertainty this year, an industry report predicted Wednesday, after the precious metal and haven investment hit a record-high price in 2023.
The World Gold Council said the commodity would in 2024 continue to benefit from strong buying by central banks, which would help to offset a slowdown in consumer demand owing to elevated prices and weaker economic growth.
The price of gold hit an all-time high at $2,135.39 an ounce at the end of 2023, which sent demand sliding.
Gold demand retreated 12 percent in the final quarter — and by five percent over the year to 4,448 tonnes, WGC said.
The record price reached in December was in large part owing to the Israel-Hamas war, according to analysts.
It gained also from traders increasingly betting on the Federal Reserve cutting US interest rates this year, which dented the dollar.
A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.
“Unwavering demand from central banks has been supportive of gold,” noted Louise Street, senior markets analyst at WGC.
“In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand and in 2024 we expect this to have a pronounced impact on the market. “Ongoing conflicts, trade tensions and over 60 elections taking place around the world, are likely to encourage investors to turn to gold for its proven track-record as a safe haven asset.” Unearthing gold can be far from safe, however. More than 70 people were killed after a tunnel collapsed at a Malian gold mining site earlier this month, local sources told AFP.
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