AI technology is not only changing the way we live and work but also impacting the demand for precious metals like gold. In the first quarter of 2024, the rise of AI in the electronics sector led to a significant 10 per cent annual increase in gold demand, overshadowing the overall 3 per cent growth in gold demand and a 2 per cent fall in jewellery demand.
The use of GPUs in AI applications, which are made with gold among other precious metals like palladium, platinum, and tantalum, is the driving force behind this surge in demand. These GPUs are essential for processing heavy visual and mathematical data models, making them a crucial component in AI technology.
Despite the high cost of using gold in chips and other electronic components, its unique properties make it essential in ensuring high conductivity and corrosion resistance, especially in critical components like printed circuit boards.
As the AI industry continues to grow rapidly, the demand for gold in the tech sector is expected to increase substantially. While the tech industry currently represents only about 7 per cent of global gold demand, the relentless pace of AI integration in various aspects of our lives could make it the primary driving force for the demand for gold in the near future.
The rise of AI technology not only signifies a major shift in how we interact with technology but also a significant impact on the global demand for precious metals, particularly gold. The connection between AI and gold may just be the beginning of a new era in the electronics industry.
