Global gold demand climbed 3% year-on-year in the second quarter of 2025, reaching 1,248.8 metric tons, driven largely by a sharp uptick in investment activity, according to the World Gold Council (WGC). Investment demand soared by 78%, offsetting weakness in other segments and underlining gold’s role as a preferred safe-haven asset in a volatile macroeconomic environment.
Spot gold prices have rallied 26% since the start of the year, briefly hitting an all-time high of \$3,500 per troy ounce in April. Market uncertainty, fuelled by unstable trade dynamics and geopolitical tensions, has pushed investors toward gold-backed financial products.
Among investment vehicles, demand for gold bars increased by 21% in Q2, while interest in gold coins continued to decline. Meanwhile, physically backed gold ETFs saw their strongest half-year inflows since early 2020, reinforcing gold’s appeal amid broader market anxiety.
However, the physical demand picture told a different story. Global jewellery consumption—the largest segment of physical gold use—fell by 14% to 341 tons, the weakest level since Q3 2020. High gold prices discouraged buyers, especially in price-sensitive markets like India and China, whose combined share of global jewellery demand dropped below 50% for just the third time in five years.
Central bank gold buying also lost momentum, with official purchases totaling 166.5 tons in the second quarter—a 21% year-on-year decline. The WGC noted that this figure includes estimates of unreported buying and added that while it has revised its full-year forecast for central bank purchases downward, the long-term move away from U.S. dollar assets in favor of gold remains intact.
On the supply side, gold recycling grew by 4% to 347.2 tons, although activity remained relatively muted despite record-high prices. In India, a key recycling hub, consumers were more inclined to trade in old jewellery for new or use it as collateral for loans.
Looking ahead, the WGC anticipates further upside for gold ETFs in the second half of 2025, though retail investment could ease slightly as prices remain elevated.
✨ Want to explore more exclusive insights into the global diamond & jewelry industry?
👉 Visit aidi.org