Investor sentiment in Western markets is increasingly shaped by concerns over economic stability, wealth preservation, and hedging against crises. The Precious Metals Study 2024, conducted by the University of St. Gallen on behalf of Philoro Edelmetalle, offers insight into these trends.
While investment demand strengthened, the jewellery market struggled under the weight of rising gold prices. Global jewellery demand fell by 11% in 2024, making it one of the weakest years since 2009, excluding the pandemic-disrupted 2020. The largest decline came from China, where demand dropped by 24%, driven by slowing income growth and weaker consumer confidence.
India, traditionally highly sensitive to gold prices, fared better. Jewellery demand there fell only 2%, supported by strong economic growth projections of 6.5% for both 2025 and 2026 and aided by a reduction in gold import duties implemented in July 2024. Festive and wedding season demand in the second half of the year further buoyed sales, pushing India’s total jewellery spending to INR 3.6 trillion, with 70% of that demand concentrated in the latter half of the year.
Other regions also recorded declines. Jewellery demand fell by 3.7% in Europe, by 2.8% across North and South America (including Brazil), and by 8.4% in the Middle East. Yet, despite lower consumption volumes, the total value of global jewellery demand reached an all-time high of USD 144 billion, thanks to the gold price rally, representing a 9% year-on-year increase in value.
The downward trend in jewellery demand extended into the first quarter of 2025. Global jewellery consumption fell by a further 21% to 380 tonnes, with India and China again recording above-average declines of 25% and 32%, respectively.
Overall, the gold market continues to be driven by strong central bank demand, especially from emerging markets and Eastern Europe. Private investors in these regions also remain active buyers. Meanwhile, Western financial investors have begun returning to the market, spurred by persistent economic uncertainty and gold’s traditional role as a safe haven.
On the supply side, 2024 saw total global gold supply reach a new record of 4,974 tonnes, a 1% increase over 2023. Mine production held steady at 3,661 tonnes while recycling climbed 11% to 1,370 tonnes, driven by high prices that encouraged increased scrap gold sales. Notably, the fourth quarter of 2024 saw 359 tonnes of recycled gold return to the market, marking a 15% year-on-year increase.
In contrast to the rise in recycling, producer hedging turned negative for the year. After contributing 67.4 tonnes to supply in 2023, net hedging fell by 56.8 tonnes in 2024 as mining companies opted to capitalize on current high prices rather than lock in future sales.
Forecasts of a sharp rise in gold supply proved overly optimistic. Once again, the gold market demonstrated its low supply elasticity, reinforcing the metal’s image as a scarce and enduring store of value, an observation underscored in the report.
