ISTANBUL

Global gold demand rose 1% to an all-time high of 5,002 tons last year, driven by increased safe-haven demand amid geopolitical tensions and weakening confidence in the dollar, according to a statement from the World Gold Council released on Thursday.

"Combined with the record-breaking run in the gold price—setting 53 new all-time highs during the year—this yielded an unprecedented value of $555 billion (+45% year-on-year)," the council said.

Last year, investment demand for gold rose 84% year-on-year to 2,175 tons.

In particular, inflows into exchange-traded funds (ETFs) reached 801 tons, surpassing demand for jewelry for the first time. Gold jewelry demand fell 18% last year due to the sharp rise in gold prices, with China's jewelry demand falling 24% to its lowest level since 2009.

Investors also increased their physical gold purchases last year. Global demand for bullion and coins rose 16% to 1,374 tons. The strongest increases in demand came from China and India, accounting for more than 50% of the increase in this category.

Total annual gold supply rose 1% last year, reaching a new record level of 3,672 tons. Recycling activities increased gold supply by 3% to 1,404 tons. This was considered a relatively low reaction compared to the 67% increase in the price of gold in US dollars.

"Technology demand was stable despite disruption in the consumer electronics space, supported by continued growth in AI-related applications," it noted.

The council added that, with continued geopolitical tensions, it expects another year of strong gold ETF inflows and robust bar and coin demand, underpinned by elevated central bank buying.

Central Bank purchases slowed

According to the statement, central bank gold purchases dropped 21% last year, falling from 1,092 tons to 863.3 tons.

The report stated that while central bank gold purchases remain at historically high levels, they have slowed compared to their recent pace.