Gold demand reached its highest first-quarter level in nine years in 2025, driven primarily by a sharp revival in ETF investments amid global economic uncertainties and geopolitical tensions, according to the World Gold Council’s latest Gold Demand Trends report.
Total gold demand, including OTC investment, rose 1% year-over-year to 1,206 tonnes in Q1 2025, the highest for a first quarter since 2016. The average gold price surged to US$2,860/oz, marking a 38% increase from the same period last year and setting multiple new record highs throughout the quarter.
Investment demand more than doubled to 552 tonnes, up 170% compared to Q1 2024, fueled by gold-backed ETFs which saw inflows of 226.5 tonnes — the strongest quarterly demand in three years. North American-listed funds attracted the highest inflows at 134 tonnes, as investors sought safe-haven assets amid stock market volatility and fears of stagflation.
Bar and coin demand remained elevated at 325 tonnes, 15% above the five-year quarterly average. China was a standout performer with its second-highest quarter for retail investment on record, increasing 12% year-over-year to 124 tonnes as investors responded to local asset underperformance and trade tensions with the US.
Central banks continued their substantial gold buying with net purchases of 244 tonnes in Q1. While this represents a slowdown from previous quarters, it remains 24% above the five-year quarterly average. The National Bank of Poland led purchases, adding 49 tonnes to its reserves.
However, jewelry demand fell sharply in the high-price environment, declining 21% to 380 tonnes – the lowest level since COVID disrupted demand in 2020. In value terms, however, consumer spending on gold jewelry grew 9% to US$35 billion.
Technology demand remained stable at 80 tonnes, with AI-related applications providing ongoing support in the electronics sector, though uncertainty over tariffs is creating a challenging outlook.
The World Gold Council anticipates that investment in gold will continue to gather pace due to near-term stagflation risks, elevated stock-bond correlations, expected acceleration in US deficits, and ongoing geopolitical tensions.
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