By Polina Devitt

LONDON, Feb 5 (Reuters) - Global gold demand including over-the-counter (OTC) trading rose by 1% to a record high of 4,974.5 metric tons in 2024 as investment increased, the World Gold Council (WGC) said on Wednesday, adding that central banks sped up buying in the fourth quarter.

Spot gold prices rose by 27% last year, the most since 2010, as investors chose the metal to hedge against global risks and as the U.S. Federal Reserve slashed interest rates. Prices hit another all-time high on Tuesday, driven by safe-haven demand after China retaliated with tariffs on the United States in response to President Donald Trump's trade levies. GOL/

Central banks, a major source of gold demand, bought more than 1,000 tons of the metal for the third year in a row in 2024. The National Bank of Poland was the largest such buyer, adding 90 tons to its reserves, the WGC, an industry body whose members are global gold miners, said in a quarterly report.

In the final quarter of 2024, when Trump won the U.S. election, buying by central banks accelerated by 54% year on year to 333 tons, the WGC calculated, based on reported purchases and an estimate of unreported buying.

Last year's investment demand for gold rose 25% to a four-year high of 1,180 tons, mainly because outflows from physically-backed gold exchange-traded funds (ETFs) dried up for the first time in four years.

Indicating a major shift in appetite for different products, investment demand for bars rose 10%, while coin buying fell 31%.

"In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates," WGC senior markets analyst Louise Street, said.

"Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk."

Total gold demand, excluding opaque OTC trading, rose 1% to 4,553.7 tons last year, the highest since 2022, the WGC said. It estimates that OTC demand fell 7% due to a slump in the final quarter of the year as profit-taking offset persistent demand from high-net-worth investors.

Gold jewellery consumption, the biggest category of physical demand, fell 11% in 2024, while mine production was steady and recycling rose 15%.

The WGC expects jewellery demand to remain under pressure and recycling to rise further this year due to high prices.

Gold supply and demand by WGC*:

*Source: Metals Focus, Refinitiv GFMS, ICE Benchmark Administration, World Gold Council.

(Reporting by Polina DevittEditing by Kirsten Donovan)

((polina.devitt@thomsonreuters.com; Reuters Messaging: polina.devitt.thomsonreuters.com@reuters.net))