Gold jewellery represents the largest source of annual demand for gold per sector. This has declined over recent decades, but it still accounts for around 50% of total gold demand.
India and China are by far the largest jewellery markets, together accounting for over 50% of the global total. The Asian and Middle Eastern markets are dominated by demand for purer, higher-carat gold.
Gold has unique properties as an asset class. Our analysis shows that modest allocations to gold can be proven to protect and enhance the performance of an investment portfolio, reducing volatility and minimising losses during periods of market shock.
Investors of all sorts are coming to accept gold as a reliable, tangible long-term store of value that has moved independently of other assets.
Central Bank Demand
Gold plays an important part in global central bank reserves, and they are significant holders of gold. The 2008 financial crisis prompted a fundamental shift in central bank behaviour towards gold, encouraging a reappraisal of its role and relevance in reserve asset management. Emerging market central banks have increased their official gold purchasing, while European banks have ceased selling, and the sector now represents a significant source of annual demand for gold.
Gold is used as an industrial metal in a broad range of applications, but demand is driven by the electronics sector which accounts for ~80% of gold used in technology. The metal is ubiquitous in most consumer electronics and automotive applications, where its chemical and physical properties combine to make it irreplaceable in many high-end devices. The trend of electrification is providing support for gold demand in the sector, with most types of semiconductor chips using the metal either as a coating, or in the form of thin bonding wires.
While electronics is by far the largest and most important source of demand, gold is found in a multitude of applications which have a direct impact on all of our lives. To learn more about the electronics sector and some of the smaller, but no less important uses for the metal, please visit: https://www.gold.org/esg/gold-and-society