AI Surge Fails to Lift Gold Demand as Manufacturers Push for Reduction

The World Gold Council (WGC) says that despite the rapid growth of artificial intelligence (AI), gold demand from the technology sector has remained relatively flat. In its 'AI Boom and Gold' report, released in February 2025, the WGC notes that while AI-related gold use has contributed modestly to the sector's overall demand, it is not enough to offset the efforts of manufacturers to reduce their use of the metal.

According to the report, technology demand for gold gained 7% in 2024 to 326 tonnes, but remained essentially flat at 323 tonnes in 2025 due to miniaturization and the push by manufacturers to eliminate or reduce gold from some components. The WGC views this situation as a 'tug-of-war' between those pushing to reduce gold use and those promoting its continued use.

However, the council sees potential for growth in the long term from emerging technologies such as co-packaged optics (CPO), which integrate optical transmitter and receiver components with circuits. The WGC notes that CPO requires gold due to its durability and electrical conductivity, and that industry heavyweights like Nvidia are investing heavily in its development.

Gold traded at $4,270.30 per ounce on Friday morning, up almost 14% from a year earlier. Electronics manufacturing represents about 80% of gold usage in industrial applications, with other uses including dentistry accounting for the rest.