Asian consumers selling jewellery is boosting gold recycling performance.
Global Gold Recycling Sector Surges
The global gold recycling sector experienced a notable surge in the first quarter of 2024, with volumes rising by 12%, as reported by the World Gold Council. A significant portion of the 350.8 tonnes recycled during this period came from China, driven by consumers selling jewellery in response to the economic challenges of 2023.
Strong Market Dynamics
The World Gold Council’s market experts are forecasting a ‘robust’ increase in scrap gold sales and recycling activities following a price rally in March and April. Recycling trends varied across regions, with China leading the way in Asia, while countries like India saw slower growth in recycling volumes. On the other hand, consumers in Europe and the US were motivated to sell gold jewellery due to significant price hikes.
Insight: The surge in recycled gold from Asian consumers selling jewellery reflects not only economic challenges but also changing consumer behavior and preferences, indicating a potential shift in the market dynamics of the gold recycling sector.
Thailand’s recycling supply remained relatively subdued despite the price rally, attributed to significant gold liquidation during the Covid financial distress depleting regional supplies. The Middle East recorded a marginal increase in recycling volumes but saw a year-on-year decline, unique to the region.
Mining and Production
Gold recovered from end-of-life electronics is becoming increasingly significant, with a record high of 893 tonnes achieved in the first three months of 2024, despite a 4% increase in mine production compared to the same period last year. The World Gold Council highlights that mining in 2023 produced 3,644.4 tonnes, the second-highest in history after the record year of 2018.
Insight: The rising importance of gold recovered from electronics showcases the evolving sources of recycled gold, contributing to the overall growth and sustainability of the gold recycling sector.
Two-thirds of the 3% growth in total gold production this year is attributed to recycling, emphasizing the critical role of recycled gold in meeting market demands.
Central Bank Survey Insights
A recent World Gold Council survey revealed that 81% of central bank reserve managers plan to increase their gold holdings in the next 12 months, marking the highest figure recorded since the survey began in 2019. Reserve managers are turning to gold to mitigate risks and prepare for ongoing political and economic uncertainties.
Insight: The increased interest in gold holdings by central banks not only underscores the importance of gold as a safe-haven asset but also signals potential growth in the demand for gold, positively impacting the gold recycling sector.
The future of gold recycling appears promising, supported by strong market dynamics, regional variations, and the significant contributions from recycled gold and mining efforts. As economic factors continue to shape consumer behavior and market trends, the gold recycling sector is poised for continued growth.
