Increased demand for gold in the technology sector

News Arnulf Hinkel, Financial journalist – 15.02.2018

Following the record year of 2016, gold demand declined last year, particularly in the investment sector. Demand for gold bars and coins also dropped by 2 per cent due to weakening purchases in the US. The technology sector, however, saw demand rise significantly. Gold jewellery was also sought after and noted a 4 per cent increase.

First y-o-y rise in demand since 2010 – a possible turnaround?

Over the entire year 2017, demand for gold recovered in the technology sector, with a particularly strong 6 per cent gain in the fourth quarter, when demand stood at 88.2 tonnes, the highest level since Q4 2014. According to the World Gold Council's annual gold demand report, a total of 332.8 tonnes of gold were used in electronic components and dentistry, putting an end to a six-year negative trend.

Semiconductors and wireless applications boost gold demand

While demand for gold in dentistry continued to decline in 2017, manufacturers of memory chips and semiconductors in particular were able to expand their production, in some cases significantly. In 2017, the Taiwan-based semiconductor manufacturer Win Semiconductors recorded a 70 per cent rise over the previous year. According to the World Gold Council, demand for gold for the production of wireless applications was estimated to have grown by 20 to 30 per cent in the last quarter of 2017. The three key components for electronics – wireless chips, printed circuit boards (PCBs) and gold bonding wires – also drove growth for gold demand in the technology sector in 2017. As the production of memory devices such as DRAMs and NAND flash memory has grown more attractive in in the course of 2017, demand for gold by chip manufacturers might well increase in 2018.

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