Fast-growing and Low-cost Indonesian Gold Miner: PT Merdeka Gold Resources Tbk | Asia Pacific

Research evidence excerpt

Fast-growing and Low-cost Indonesian Gold Miner: PT Merdeka Gold Resources Tbk | Asia Pacific

FoundationM

Gold Price Outlook

Supply and Demand

Global gold demand generally falls into two broad categories:

(i) Fabrication demand: This category comprises demand from end-use sectors and

generally depends on macroeconomic conditions and gold prices. Fabrication demand

often strengthens during periods of economic expansion and rising consumer spending.

Conversely, periods of economic uncertainty can weigh on fabrication demand while

increasing investor interest in gold due to its perceived safe-haven characteristics.

(ii) Investment demand: Gold serves as an alternative financial asset and is widely used as

a store of value. Investors use gold to diversify portfolios, hedge against inflation, and

preserve capital during periods of economic or financial stress.

According to CRU, global gold demand is expected to increase modestly from 128.8Moz in

2024 to 129.5Moz by 2030.

Gold demand is expected to become more balanced between fabrication and investment

demand over the medium term. In 2020, investment and fabrication demand converged as

Covid-19 increased economic uncertainty and supported higher investment demand for

gold. From 2021 to 2024, fabrication demand accounted for a larger share of total gold

demand as economies reopened and gradually recovered, supported in part by a rebound

in jewellery consumption. During the same period, investment demand moderated as

higher interest rates and rising real yields increased the opportunity cost of holding non-

yielding assets such as gold.

From 2026 to 2029, CRU expects investment demand to exceed fabrication demand,

driven by declining interest rates, rising inflation expectations, and elevated geopolitical

uncertainty.