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Gold Demand and Price Trends
Gold demand has been on the rise, driven by growing geopolitical tensions and uncertainty surrounding threatened Trump tariffs. According to the World Gold Council, physically-backed gold ETFs saw their largest weekly inflow since March 2022, with a total of 52.4 tons, or roughly $4.9 billion, added to their holdings.
Gold ETF Holdings Reach Record High
As of the end of 2024, gold ETF holdings stood at 3,326 tons, worth roughly $314 billion. The majority of the added demand came from North America, with the World Gold Council reporting that the region accounted for 55% of the total inflows.
Gold-Backed Cryptocurrencies Perform Well
Gold-backed cryptocurrencies, such as Paxos Gold (PAXG) and Tether Gold (XAUT), have outperformed the broader crypto market, which is up 26% year-over-year. These tokens are designed to track the price of gold, and their demand has risen as a result of the growing interest in the precious metal.
Supply and Demand Dynamics
Despite the increased demand, supply seems to have barely changed. The World Gold Council reported that mining production in the fourth quarter of 2024 dropped by around two tons from the previous quarter, while hedging and recycling grew. As a result, total tracked supply rose around 1% year-over-year.
Conclusion
The recent surge in gold demand and price trends are driven by growing geopolitical tensions and uncertainty surrounding threatened Trump tariffs. The demand for gold-backed cryptocurrencies, such as Paxos Gold and Tether Gold, has also risen as a result. As the world’s appetite for gold continues to grow, it is essential to monitor the supply and demand dynamics to better understand the implications for the precious metal’s price.
FAQs
Q: What are the main drivers of the recent surge in gold demand?
A: Growing geopolitical tensions and uncertainty surrounding threatened Trump tariffs are the primary drivers of the recent surge in gold demand.
Q: What is the current state of gold ETF holdings?
A: As of the end of 2024, gold ETF holdings stood at 3,326 tons, worth roughly $314 billion.
Q: How has the demand for gold-backed cryptocurrencies changed?
A: The demand for gold-backed cryptocurrencies, such as Paxos Gold and Tether Gold, has risen as a result of the growing interest in the precious metal.
Q: What is the current state of supply and demand dynamics in the gold market?
A: Despite the increased demand, supply seems to have barely changed, with mining production dropping by around two tons from the previous quarter, while hedging and recycling grew.
