A new source of demand is emerging in the gold market, fueled by the rapid expansion of artificial intelligence (AI) technology and its supporting infrastructure. The buildout of AI is driving increased investment in advanced semiconductors, servers, and data centers, all of which require materials such as gold for high-performance electronics due to its conductivity, reliability, and resistance to corrosion [1].
Despite gold trading at approximately $4,153 an ounce on October 5—up nearly 6%, or about $225, from a year earlier—technology companies are not widely substituting gold with cheaper alternatives. Joseph Cavatoni, senior market strategist for North America at the World Gold Council, noted that while companies often seek less expensive materials after developing gold-based technology, this trend is not evident in the current AI-driven market [1].
According to the World Gold Council, technology demand for gold rose 2% year-over-year to 80.4 metric tons in the second quarter, with electronics demand specifically climbing 4% to 68.3 tons. This growth is attributed to the AI sector's infrastructure needs, including high-end semiconductors and advanced components [1]. Cavatoni emphasized that the AI sector may be less sensitive to elevated gold prices because only relatively small amounts of the metal are required for these applications [1].
While technology remains a smaller segment of overall gold demand compared to investment, central-bank buying, and jewelry, its contribution is becoming increasingly significant. Cavatoni stated that technology is an "increasingly important contributor to gold demand that doesn’t appear to be slowing down anytime soon," though it is "less likely to be a driver of the price of gold" [1].
CONCLUSION
The AI industry's expansion is creating a notable and resilient source of gold demand, even as prices reach historic highs. While technology's share of the gold market remains modest, its growth trajectory suggests continued support for gold demand, with limited sensitivity to price increases.