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The global gold market has weathered an eventful 2024. Buffeted by geopolitical tensions, inflationary pressures and shifting monetary policies, the precious metal has once again proven its resilience as a cornerstone of stability.
As central banks intensified their appetite for gold and technological innovations began transforming its trade and utilization, the outlook for 2025 seems equally dynamic. To delve deeper into the trends, The Asset ( TA ) spoke with David Tait ( DT ), the CEO of the World Gold Council, to get his insights into the forces shaping the gold landscape today and tomorrow.
TA: What, in your view, was the most significant event or trend shaping the gold market in 2024?
DT: The most defining trend of 2024 was the heightened global economic uncertainty, driven by inflationary pressures and geopolitical tensions. These factors bolstered gold’s role as a safe-haven asset, attracting increased investor interest.
The shift in global interest rate policies during Q3 further enhanced gold’s appeal, as the opportunity cost of owning it diminished. Central banks also played a pivotal role, with gold demand in the first half of the year reaching its highest level since the early 2000s, reinforcing gold’s strategic importance in hedging against sanctions and sovereign risks.
TA: At our meeting in Singapore earlier this year, you were upbeat about the potential of tokenized gold to shape the future of gold trading. Has there been progress in this area?
DT: Indeed, the digitalization of gold is a major focus for us. While several “digital island” gold tokens have emerged globally, they often face limitations in functionality and integration. At the World Gold Council, we are taking a different approach by working to digitalize gold in a way that removes barriers related to its physical movement and storage.
We introduced the Standard Gold Unit ( SGU ), a token that decouples gold’s monetary value from its physical attributes. This allows gold to function seamlessly as collateral across financial markets. Our pilot project, conducted with Digital Asset and other stakeholders, demonstrated the viability of using digital representations of gold for instantaneous settlements and transparent financial transactions.
This marks a significant step towards mobilizing gold within financial markets. Looking ahead, we aim to expand the SGU ecosystem and develop a suite of tokenized gold products for broader use.
TA: Central banks have been aggressively adding to their gold reserves. Do you foresee this trend continuing in 2025?
DT: Absolutely. Central banks’ demand for gold remains robust, driven by complex geopolitical and financial dynamics. Our 2024 survey revealed that nearly 30% of central banks plan to increase their gold holdings within the next year.
This trend reflects their desire to rebalance reserves in the face of heightened financial risks, inflation, and domestic production strategies. With ongoing geopolitical tensions and uneven economic recovery, gold will continue to serve as a strategic asset, providing diversification and stability in central bank portfolios.
TA: Given these dynamics, what is your outlook for gold prices in 2025?
DT: The anticipated narrative for 2025 involves significant global rate cuts, which could further elevate gold prices. Historically, gold has returned an average of 6% in the six months following the onset of rate-cutting cycles.
While short-term price volatility may persist, long-term prospects for gold remain favourable. In an era of heightened equity bond correlations and evolving macroeconomic conditions, gold’s role as a hedge and portfolio diversifier will be indispensable.
TA: Sustainability is increasingly critical in every sector. What are the World Gold Council’s priorities in addressing environmental concerns in 2025?
DT: Sustainability is central to our mission. Our Responsible Gold Mining Principles provide a comprehensive framework for ethical and environmentally sound mining practices. These standards address critical environmental, social and governance ( ESG ) challenges within the gold mining sector.
In 2024, we took another step forward by collaborating with organizations like the Copper Mark and the Mining Association of Canada to launch a draft Consolidated Mining Standard Initiative.
This aims to create a unified standard for mining companies globally, driving ESG performance improvement at scale. We are committed to fostering sustainability while reinforcing gold’s reputation as a responsible investment and store of value.
