The Top 5 Uses of Gold | What Is Gold Used For?
At a Glance:
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- The highest annual demand for gold in 2024 comes from the jewelry industry.
- Aside from jewelry, the bulk of mined gold makes its way into central banks, gold bars, and coins.
- On this page, learn about the top 5 uses of gold according to the latest available data.
What is Gold Used For?
In 2024, Statista estimates that the global mining industry will produce over 124 million ounces of gold. Global gold production has increased nearly every year since 2008, and demand shows few signs of slowing. Part of what makes gold such a popular investment is its wide range of uses. Because multiple different industries require large amounts of gold, the precious metal is always in demand.
But what does humanity do with a jaw-dropping 124 million ounces of gold? In other words, what is gold used for?
According to the USGS’s 2024 Mineral Commodity Summary, five industries make up the bulk of the world’s demand for gold:
- Jewelry (46%)
- Banking Uses (23%)
- Gold Bars (16%)
- Gold Coins and Medals (9%)
- Electronics (5%)
On this page, learn more about gold’s many uses – and how growing demand in 2024 may shape the future of humanity’s most precious metal.
Top 5 Uses of Gold (Updated For August 2024)
For most committed gold stackers, gold’s most important use is as an investment. Gold is a safe haven asset, so it plays a vital role in portfolio diversification and can help investors thrive during uncertain times. Gold coins, medals, and bars only make up around 25% of the annual demand for gold, though.
Instead, gold’s two biggest demand drivers in 2024 are the jewelry and banking industries. After gold jewelry and banking, gold bars, coins and medals, and electronics round out the top five uses of gold.
Below, we’ll take a look at the top five biggest demand drivers for gold in 2024.
#1: Jewelry is Gold’s Biggest Demand Driver
Nearly half of all mined gold is used to manufacture jewelry – 46%, to be specific. This makes the gold jewelry industry the single biggest demand driver for gold bullion. 24 karat gold, or gold that is at least 99.99% pure, is commonly used in engagement rings. Many gold jewelry products are sold at high markups over spot price and contain gold with a lower fineness compared to gold coins or bars.
India and China are the two largest consumers of gold jewelry, according to Investopedia. In 2019, demand for gold jewelry was above 130 tons for each of these countries! As a point of comparison, the United States was the third biggest gold jewelry consumer in 2019, and demand for gold jewelry in the U.S. only reached 34.8 tons.
Extreme demand for gold jewelry, especially in India and China, is one big reason why jewelry is the largest demand driver for gold bullion.
#2: The Banking Industry
The second biggest demand driver for gold is in the banking industry. Banks usually buy gold in order to hedge against weakening reserve currencies. Central banks make up the majority of banking demand for gold bullion, since central banks are responsible for managing the monetary policies of countries they are managed by.
In fact, central banks bought a whopping 1,037 tons of gold in 2023, which was the second highest total in history. China’s gold reserves drove demand for gold in the banking sector in 2023, making it the biggest single gold buyer in the world.
Although China suspended its gold purchasing efforts earlier this year, banks are projected to account for around 23% of global demand for gold bullion in 2024.
#3: Gold Bullion Bars
Investment gold may not be the largest demand driver for the precious metal, but the creation of gold bullion bars is still one of the biggest uses of gold. The United States Geological Survey estimates that 16% of American gold will be used to produce gold bars in 2024. Gold bars are considered the most cost effective way to invest in gold, since these products are sold at lower premiums over spot price compared to many gold coins.
Popular gold bars are produced in extremely high numbers every year, which certainly helps gold bar production to remain one of the largest demand drivers for gold bullion. Out of every one-hundred ounces of gold mined, experts estimate that sixteen of those ounces will be used to produce gold bars!
#4: Gold Coins and Medals
Gold coins are among the most recognizable gold products, but they actually only make up 9% of global demand for gold. In the USGS Mineral Commodity Summaries Report, gold coins are grouped together with medals, which are commemorative gold products not given a denomination.
Like gold bars, gold coins and medals are used as investment vehicles. Investors usually purchase gold coins to diversify their portfolios and protect their assets from inflation or economic uncertainty. Gold coins are usually sold at higher premiums over spot price than gold bars, but their potential for numismatic appreciation makes them ideal for building a more sustainable and diverse portfolio.
#5: Electronics and Electrical Applications
Rounding off our list of gold’s biggest 2024 demand drivers is the electronics industry. Electronics account for around 5% of gold’s annual demand. The high conductivity of gold makes it a useful tool in the production of electronics. Electrical wiring also sometimes uses gold, although this is usually only the case for rare, specialized wiring in niche industries.
Circuit boards, connectors, CPUs, and cell phones are just a handful of the various ways that the technology industry uses gold. These electronics tend to use only trace amounts of gold, though, so don’t get too excited about the iPhone in your pocket! Because of the massive size and scale of the electronics industry, around one in every twenty ounces of gold winds up in some sort of electronic device.
Gold’s Biggest 2024 Demand Drivers Visualized
As we discussed above, the five biggest demand drivers for gold in 2024 are projected to be (in order):
- Gold Jewelry
- Banking
- Gold Bars
- Gold Coins and Medals
- Electronics
Here’s a visual breakdown of how gold is used in industries around the world:
Why Do Gold’s Uses Matter?
Understanding the biggest demand drivers for gold is one way that investors can make more informed investing decisions. Like all investments, the value of gold is determined primarily by supply and demand. If one of gold’s biggest demand drivers, such as gold jewelry, hits a serious structural obstacle, expect the value of gold to decrease.
Jewelry, banking, gold bars, gold coins and medals, and the electronics industry are the five biggest drivers of demand for gold. Paying close attention to developments in this industry can give investors clues about where gold prices may be heading.
Final Thoughts: What Is Gold Used For?
Jewelry (46%) is projected to be the biggest demand driver for gold in 2024, followed by banking uses (23%), gold bars (16%), gold coins and medals (9%), and electronics (5%). A long list of niche uses (1%) make up the remainder of global demand for gold.
Gold investors should closely follow demand trends in the gold industry, since supply and demand dynamics remain one of the biggest factors behind the value of gold.
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.