Gold Futures Hit Fresh Record on Safe-Haven Demand

Gold futures have been on a tear lately, reaching fresh record highs as investors seek refuge in the precious metal amid economic uncertainty and geopolitical risks. The World Gold Council reports that total gold demand in 2024 reached a record high of 4,974t, driven by strong investment demand, particularly from central banks and ETFs. Central banks continued to hoover up gold at an eye-watering pace, buying exceeded 1,000t for the third year in a row, accelerating sharply in Q4 to 333t. Annual investment reached a four-year high of 1,180t (+25%), with gold ETFs playing a sizable role in this growth. The LBMA (PM) gold price reached 40 new record highs during 2024, with the average Q4 price of US$2,663/oz also a record, yielding an annual average price of US$2,386/oz (+23%).



The strong demand for gold futures can be attributed to several factors:

1. Central Bank Buying: Central banks have been actively purchasing gold as a safe-haven asset and a store of value. Their continued buying has contributed to the overall growth in the gold market, including physical gold and gold ETFs.
2. Investment Demand: The high price environment took its toll on jewellery consumption, but economic uncertainty and geopolitical risks have driven investors to seek refuge in gold. The combination of these factors has led to increased demand for gold as a safe-haven asset, contributing to its record high in futures markets.
3. Technological Demand: The demand for gold in technology applications grew by 21t (+7%) in 2024, driven by continued growth in AI adoption. This expanding use of gold in technology sectors signals its versatility and value, which supports its perception as a safe-haven asset.



Looking ahead, gold futures are likely to remain in demand as long as economic uncertainty and geopolitical risks persist. Central banks and institutional investors are expected to continue driving demand for gold futures, given their role as key players in the market. However, it is essential to remain cautious, as the gold market is subject to volatility and potential risks. As always, it is crucial to conduct thorough research and consider your risk tolerance before making any investment decisions.

In conclusion, gold futures have hit fresh record highs on safe-haven demand, driven by central bank buying, investment demand, and technological applications. As long as economic uncertainty and geopolitical risks remain, gold futures are likely to continue their upward trajectory. However, investors should remain vigilant and consider the potential risks before making any investment decisions.