LONDON (Reuters) - The technology sector’s demand for gold is set to grow this year for the first time since 2010 as vehicle electronics become more sophisticated and use of the precious metal in smartphone memory chips expands, an industry body reported on Tuesday.
The World Gold Council said technological demand for gold had risen by 5.4 tonnes so far this year after six years of contraction. In the full year it is expected to be 6-8 tonnes higher than in 2016, the WGC’s head of market intelligence Alistair Hewitt said.
Use of gold bonding wire has plateaued after years of decline, the WGC said, and the development of new technology for use in smartphones and electric cars has the potential to drive demand higher yet.
Current generation smartphones contain $1.00-1.50 worth of gold per unit, the WGC estimates.
“Given the complexity of some of the features making an appearance on these devices, we expect that many of them will contain more gold than previous iterations,” it said. “Features such as facial recognition ID, wireless charging and infrared sensors all require advanced semiconductors, which contain both gold contacts and bonding wire.”
The drive towards greater uptake of hybrid and electric vehicles in the automotive sector will also lift gold demand, it said. The metal is used in chips governing engine and braking system management, and in entertainment systems.
“The prospect of autonomous vehicles should fuel yet more demand for gold via the inclusion of high-end electronics, such as collision avoidance systems,” it said.
Further out, gold use in nanotechnology, for applications such as fuel cells and solar energy technology, is also likely to rise, the WGC said.
Gold demand for use in electronics peaked at 327 tonnes in 2010, before surging prices prompted manufacturers to cut the amount of metal they used on cost grounds. By last year it had dwindled to just 256 tonnes, accounting for just under 6 percent of total demand.
Reporting by Jan Harvey; Editing by Gareth Jones