Gold Purchase Strategies for Consumers in Turbulent Times

Demand fell 5% to 1,102 metric tons in the first quarter, however, when over-the-counter purchases were excluded, according to the Gold Demands Trends report for the first quarter of 2024. Central banks continued to buy gold, adding 290 metric tons to their official holdings.

The gold price in the quarter ending March 31 was at a record quarterly average of $2,070 per ounce, according to LBMA (London Bullion Market Association), 10% higher than in the first quarter of last year.

“Since March, the gold price has climbed to all-time highs, despite traditional headwinds of a strong U.S. dollar and interest rates that are proving to be ‘higher for longer,’” said Louise Street, senior market analyst at the World Gold Council.

“Interestingly, we are witnessing shifting behavior trends from Eastern and Western investors. Typically, investors in Eastern markets are more responsive to the gold price, waiting for a dip to buy, whereas Western investors have historically been attracted to a rising price, tending to buy into the rally,” Street said.

“Looking ahead, 2024 is likely to produce a much stronger return for gold than we anticipated at the beginning of the year based on its recent performance. Should the price level off in the coming months, some price-sensitive buyers may re-enter the market and investors will continue to look to gold for a safe-haven asset as they seek clarity around rate cuts and election results,” Street said.

The Gold Demand Trends report states in its outlook that “the stellar run-up in price in the recent weeks will likely prompt a rise in recycling supply and a fall in jewelry demand, although elevated geopolitical risk and the quasi-involvement role of jewelry in some countries may limit the impact.”

Gold Demand Trends states that bar and coin investment increased 3% year-on-year, remaining steady with the fourth quarter of 2023 at 312 metric tons, while gold exchange-traded funds continued to see outflows with global holdings falling by 114 metric tons.

Buyer interest remained healthy, as suggested by the usual uplift in January sales of Gold Eagle coins reported by the U.S. Mint, according to the report. The report also says conflicts in the Middle East and Ukraine and a minor boost from Costco’s recent entry to the gold bar kept demand healthy.

Walmart and Amazon, as well as Costco, are selling gold bars, coins, and other precious metals, according to an AARP article. Costco members can buy one-ounce bars on the website, but Costco limited sales to two bars due to high demand. Wells Fargo estimated Costco was bringing in as much as $200 million per month on the bullion bars, according to CNBC.

North American and European ETFs led the outflows that were slightly offset by inflows from Asian-listed products, according to Gold Demand Trends. China generated the bulk of the Asian increase, with renewed investor interest in gold due to the weakening local currency and poorly performing domestic equity markets.

The report states that gold jewelry demand remained resilient despite record high gold prices, only falling 2% from the first quarter of 2023, and Asian demand countered decreases in Europe and North America. Mine production was up, too, increasing 4% to 893 metric tons, a record first quarter, according to the report.

Recycling also reached its highest level since the third quarter of 2020, rising 12% to 351 metric tons compared with the first quarter of 2023. The report says higher gold prices provided an opportunity for some to cash in on their old gold jewelry for recycling. 

Demand fell 5% to 1,102 metric tons in the first quarter, however, when over-the-counter purchases were excluded, according to the Gold Demands Trends report for the first quarter of 2024. Central banks continued to buy gold, adding 290 metric tons to their official holdings.

The gold price in the quarter ending March 31 was at a record quarterly average of $2,070 per ounce, according to LBMA (London Bullion Market Association), 10% higher than in the first quarter of last year.

“Since March, the gold price has climbed to all-time highs, despite traditional headwinds of a strong U.S. dollar and interest rates that are proving to be ‘higher for longer,’” said Louise Street, senior market analyst at the World Gold Council.

“Interestingly, we are witnessing shifting behavior trends from Eastern and Western investors. Typically, investors in Eastern markets are more responsive to the gold price, waiting for a dip to buy, whereas Western investors have historically been attracted to a rising price, tending to buy into the rally,” Street said.

“Looking ahead, 2024 is likely to produce a much stronger return for gold than we anticipated at the beginning of the year based on its recent performance. Should the price level off in the coming months, some price-sensitive buyers may re-enter the market and investors will continue to look to gold for a safe-haven asset as they seek clarity around rate cuts and election results,” Street said.

The Gold Demand Trends report states in its outlook that “the stellar run-up in price in the recent weeks will likely prompt a rise in recycling supply and a fall in jewelry demand, although elevated geopolitical risk and the quasi-involvement role of jewelry in some countries may limit the impact.”

Gold Demand Trends states that bar and coin investment increased 3% year-on-year, remaining steady with the fourth quarter of 2023 at 312 metric tons, while gold exchange-traded funds continued to see outflows with global holdings falling by 114 metric tons.

Buyer interest remained healthy, as suggested by the usual uplift in January sales of Gold Eagle coins reported by the U.S. Mint, according to the report. The report also says conflicts in the Middle East and Ukraine and a minor boost from Costco’s recent entry to the gold bar kept demand healthy.

Walmart and Amazon, as well as Costco, are selling gold bars, coins, and other precious metals, according to an AARP article. Costco members can buy one-ounce bars on the website, but Costco limited sales to two bars due to high demand. Wells Fargo estimated Costco was bringing in as much as $200 million per month on the bullion bars, according to CNBC.

North American and European ETFs led the outflows that were slightly offset by inflows from Asian-listed products, according to Gold Demand Trends. China generated the bulk of the Asian increase, with renewed investor interest in gold due to the weakening local currency and poorly performing domestic equity markets.

The report states that gold jewelry demand remained resilient despite record high gold prices, only falling 2% from the first quarter of 2023, and Asian demand countered decreases in Europe and North America. Mine production was up, too, increasing 4% to 893 metric tons, a record first quarter, according to the report.

Recycling also reached its highest level since the third quarter of 2020, rising 12% to 351 metric tons compared with the first quarter of 2023. The report says higher gold prices provided an opportunity for some to cash in on their old gold jewelry for recycling.