Gold Demand Fails to Rise with AI Boom

The World Gold Council (WGC) has reported that despite the growing demand for AI chips, gold demand in the technology sector remained flat at 323 tonnes in 2025. This is a surprise given the significant increase in sales of AI-related products, which one might expect to drive up gold usage.

The WGC attributes this lack of growth in gold demand to miniaturisation and design changes in electronics manufacturing, which have reduced or eliminated the need for gold in some components. However, the report notes that co-packaged optics (CPO) for hyperscale AI data centres could become a new source of demand for gold.

CPOs integrate optical transmitters/receivers directly with compute chips to boost bandwidth in AI hardware, and require gold due to its durability and conductivity. The WGC's report frames electronics demand as a 'tug-of-war' between substitution and new uses, highlighting the complex dynamics at play in the market.

The 14% price rise in gold over the past year, to around $4,270/oz, is also having an impact on manufacturers who are redesigning connectors and contacts to reduce costs.