The rise in AI technology is expected to drive an increase in industrial demand for precious metals by 2024, according to a recent note from independent research consultancy Metals Focus. The sluggish global economy has led to muted demand for precious metals in the tech and industrial sectors this year, with gold demand down 3% and electronics sector demand dropping by 4% in the third quarter. However, Metals Focus predicts that the evolving AI industry will reverse this trend in the coming year, driving demand not just for gold but also for silver, platinum, and palladium. The increased demand will be supported by the growth of AI servers and switches, leading to a double-digit rise in shipping. Platinum alloys, silver-palladium MLCCs, gold bonding wire, gold plating, and palladium plating are among the components expected to see increased demand. The silver market will likely be most impacted, as it is essential in many electronic applications and faces supply constraints due to growing demand in the green energy sector. Although industry and tech only account for 7% of global gold demand, this still amounted to over 75 tons in the third quarter.
