One surprising commodity could benefit from the AI boom
World Gold Council’s Joe Cavatoni says gold’s role in chips and advanced technology could expand alongside the rapidly growing AI industry.
Investors have long prized gold as a hedge against inflation and economic uncertainty, but one of the world’s fastest-growing industries is now fueling a new source of demand for the precious metal.
The buildout of artificial intelligence (AI) is driving investment in advanced semiconductors, servers and the sprawling data centers needed to power the technology. That expansion also requires a range of materials used in high-performance electronics, including gold.
And the AI boom is creating a growing need at a time when gold is already historically expensive. Despite those high prices, tech companies aren't necessarily switching to cheaper materials — suggesting demand for golf could continue to grow alongside AI.
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Gold is used in advanced semiconductors and electronics that help power the growing artificial intelligence industry. (Oscar Del Pozo/AFP/Getty Images)
Gold is valued in electronics for its conductivity, reliability and resistance to corrosion — and its role in some technology applications is proving resilient despite trading at roughly $4,153 an ounce on Oct. 5, up nearly 6%, or about $225, from a year earlier.
Joseph Cavatoni, a gold market expert and senior market strategist for North America at the World Gold Council, said companies would typically consider cheaper alternatives after developing technology that relies on gold.
But that isn't necessarily happening.
"They might pioneer a technology with gold involved and then say, ‘Let’s find something cheaper like tungsten to replace it,’" Cavatoni told Fox News Digital. "But what we’re finding in this case is they’re not."
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The artificial intelligence boom is fueling demand for advanced chips, servers and data centers, creating a growing need for materials such as gold. (Mikala Compton/The Austin American-Statesman/Getty Images)
Technology demand is already showing signs of growth. Gold demand from the sector rose 2% from a year earlier to 80.4 metric tons in the second quarter, according to the World Gold Council. Electronics demand climbed 4% to 68.3 tons, fueled by AI infrastructure, high-end semiconductors and advanced components.
Cavatoni said gold can offer advantages over substitutes in applications such as chip production and heat conduction. The AI sector may also be less sensitive to elevated gold prices because relatively small amounts of the metal are needed.
"This is a rapidly growing space that’s less sensitive to price," Cavatoni said. "It’s going to likely continue to grow as the AI space grows."
Gold is used in advanced semiconductor chips because of its conductivity and reliability, making the precious metal an important material in the hardware powering the AI boom. (Doug Jones/Portland Press Herald/Getty Images)
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Still, technology remains a small part of the overall gold market compared with investment, central-bank buying and jewelry. Cavatoni said it is "less likely to be a driver of the price of gold."
For now, Cavatoni described technology as an increasingly important contributor to gold demand that "doesn’t appear to be slowing down anytime soon."
