• Russia's gold reserves have exceeded $200 billion for the first time, despite a decrease in international reserves.
• Global demand for gold is surging, with total demand exceeding $100 billion for the first time.
• Gold is playing a significant role in technology, with demand growing 7% year-on-year.
• The global gold market is witnessing a shift in demand and supply dynamics, making it a space to watch closely.

Russia's gold reserves have reached a historic high, exceeding $200 billion for the first time. The country's central bank confirmed this milestone, noting that the share of gold among Russia's international reserves rose to 32.9 per cent from 31.5 per cent last month. This is the highest it has been since November 1999, when it was 34 per cent. The highest proportion of gold was 56.9 per cent on January 1, 1993, while the lowest was 2.1 per cent in June 2007.

However, despite the increase in gold reserves, Russia's international reserves fell to $631.6 billion in October, down from $633.7 billion in September. This comes at a time when the global demand for gold is surging.

The World Gold Council's Q3 2024 Gold Demand Trends report reveals that total gold demand increased 5% year-on-year to 1,313t, a record third quarter. Total demand exceeded US$100bn for the first time on record, supported by strong investment in a record-high price environment.

Global Investment Demand and Gold Prices

Global investment demand more than doubled year-on-year to 364t, driven by a shift in demand for gold ETFs primarily from Western investors. Gold ETFs added 95t globally, marking the first positive quarter since Q1'22. Despite a 9% decline in bar and coin demand, the year-to-date total remains strong at 859t compared to the 10-year average of 774t.

Central bank buying slowed in Q3, though demand remained robust at 186t. Year-to-date central bank demand reached 694t, in line with the same period of 2022. Gold prices continued to rise to record highs during the quarter, reaching an average of US$2,474/oz. This hampered global demand for gold jewellery, with total jewellery consumption down 12% year-on-year on a volume basis, but up 13% in value terms.

The Role of Gold in Technology and Future Trends

In addition to its traditional uses, gold is also playing a significant role in technology. Total demand for gold in technology grew 7% year-on-year, bolstered by growth from the electronics sector as the AI boom continues to support demand for gold. Total gold supply increased 5% year-on-year, with a jump of 6% in mine production and an 11% rise in recycling.

Looking ahead, the step-change in gold investment flows is a trend that is likely to continue, which could keep both demand and price levels elevated. However, with over 30 record price highs in 2024, the environment will continue to be challenging for consumers. The prospect of economic growth is another factor that could tip the scales in the future.