The World Gold Council’s latest report highlights the surge in gold demand in the first quarter of 2025, driven by a sharp increase in investment demand. This year-on-year growth was a notable 1 per cent, exceeding expectations. Investment demand accounted for a significant share of the total gold demand, with investment demand more than doubling to 552 tonnes.
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- Investment demand doubled year-on-year.
- Rising global uncertainty led to increased investor sentiment.
- Price momentum boosted ETF inflows.
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A rebound in gold-backed exchange-traded funds (ETFs) was the standout driver of this surge in investment demand. ETF inflows alone reached 226 tonnes, boosted by price momentum and rising global uncertainty. This increase represents a 170 per cent year-on-year growth. Asian inflows also surged, surpassing their Q1 total.
“Over the past 10 months, investors have returned to gold ETFs, ramping up their allocations since Q3 last year,” said Louise Street, senior markets analyst at the WGC. “Already in April, Asian inflows have stormed past their Q1 total. However, there is still room for growth, with global gold ETF holdings sitting 10 per cent below their 2020 high.”
In addition to the rebound in ETFs, gold bar and coin demand rose 3 per cent year-on-year to 325 tonnes. This increase was largely driven by a surge in retail investment in China, which posted its second-highest quarter on record. Eastern markets strengthened, offsetting a 22 per cent decline in demand from US investors. Europe saw a modest recovery of 12 tonnes, but this was from a low base in Q1 2024. In the Middle East, gold’s traditional appeal remained evident. Gold investment demand in the Middle East remained resilient, underpinned by continued geopolitical uncertainty and positive price expectations. The region saw a notable increase in bar and coin demand, with Saudi Arabia posting a 15 per cent year-on-year increase. Jewellery demand, however, was impacted by the record price environment, with gold hitting 20 all-time highs during the quarter.
- Global jewellery volumes fell to their lowest since 2020.
- Consumer spending rose 9 per cent year-on-year to $35bn in Q1.
- Gold value appreciation drove value higher.
Despite this, consumer spending rose 9 per cent year-on-year to $35bn in Q1, driven by price appreciation. All markets except China recorded increases in the value of gold jewellery demand. The value of gold jewellery demand increased by 4 per cent in Asia, 12 per cent in Europe, and 25 per cent in the US.
The supply side also experienced a mixed result.
| Production | 1,206 tonnes |
| Recycling | 1,176 tonnes |
Gold production remained relatively flat at 1,206 tonnes, but slightly lower recycling levels offset this. Technology demand remained stable at 80 tonnes. “It’s been a bumpy start to the year for global markets as trade turmoil, unpredictable US policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors,” Street noted. The return of investors to gold ETFs paved the way for the highest level of first quarter demand since 2016.
The World Gold Council expects continued demand from institutions, individual investors, and central banks, as persistent global uncertainty enhances gold’s appeal as a safe haven asset.
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