In a riveting discussion, Sachin Jain, Regional CEO of the World Gold Council, shares insights on the extraordinary peaks in gold prices in 2024. He explores how geopolitical tensions shape market trends and highlights the remarkable consumer demand in India, particularly during festive seasons. Jain also delves into the growing interest in gold-backed ETFs among millennials and the increasing integration of gold in technology. Additionally, he discusses the volatility stemming from political shifts and forecasts a bright future for gold as a resilient investment.
In 2024, gold prices have surged to record highs primarily due to geopolitical tensions, central bank strategies, and shifting investor sentiment.
India's surge in gold jewelry demand, driven by cultural practices and duty cuts, highlights gold's dual role as a financial asset and cultural symbol.
Deep dives
Record Highs in Gold Prices
Gold prices have seen a remarkable increase, reaching record highs in 2024, largely driven by geopolitical tensions and changes in investment patterns. A one-kilogram gold bar, which cost approximately $64,000 a year ago, surged to around $76,000 recently, with the market witnessing over 40 peaks in gold prices in just 10 months. The fluctuation is attributed to factors such as warfare impacts and central bank policies, including significant purchasing activities by global central banks seeking safe-haven assets. This growing trend indicates a shift in how investors perceive gold, especially in uncertain economic climates.
Increasing Demand in India
India's demand for gold jewelry reached its highest levels in nine years, coinciding with an import duty cut, which significantly boosted market activity. During the July-September quarter alone, consumers purchased approximately 248 tons, marking an 18% increase in volume and 53% in value year-over-year. A clear passion for gold jewelry during the wedding season drives this demand, with cultural practices ensuring consistent purchase patterns regardless of price fluctuations. This high demand reflects the unique position of gold within Indian society as not only an investment but also an essential cultural asset.
The Role of ETFs and Technological Advances
The popularity of gold-backed exchange-traded funds (ETFs) is on the rise, especially among millennials, who prefer the convenience of digital investments. These ETFs allow investors to buy and sell gold easily without the need for physical storage, contributing to a growing trend in gold investments. Furthermore, the use of gold is expanding into technological advancements, including applications in AI and medical testing, which signals a shift in gold's role in modern society. As these developments unfold, gold is likely to maintain its significance in both investment portfolios and technological applications.
Gold has had an extraordinary year in 2024, marked 40 record-breaking price peaks and a recent volatility…all influenced by geopolitical events, Fed rate cuts, central bank purchases and Trump’s return to the White House. India’s consumer demand was a standout despite price hikes and helped by a duty cut. Gold-backed ETFs gained traction, growing by 14 tons this year. And let’s not forget the growing demand for the yellow metal in AI technology. Host Anirban Chowdhury talks to Sachin Jain, Regional CEO, World Gold Council, Gayatri Nayak from ET and S Mehta of Indian Bullion and Jewellers Association to chronicle the new age gold rush.