NEW DELHI, Dec 29: Gold emerged as one of the biggest winners of 2025, posting record demand and historic price levels as investors across the world turned to the yellow metal amid prolonged global uncertainty.
Data released by the World Gold Council (WGC) shows that from the first quarter through the third quarter of the year, gold demand strengthened steadily, with investment activity and central bank purchases playing a decisive role.
The year opened on a strong note. In the first quarter of 2025, total gold demand stood at 1,206 tonnes, marking the highest first-quarter demand since 2016.
The sharp rise was largely driven by investors returning to gold as concerns over geopolitical tensions, global trade policies and volatile stock markets grew.
Gold-backed exchange traded funds (ETFs) saw heavy inflows, leading to a more than doubling of overall investment demand compared to the previous year.
Exchange Traded Funds refer to investment funds that hold a basket of assets (stocks, bonds, commodities) and trade on stock exchanges like individual stocks offering diversification and lower costs.
Gold prices reacted quickly to this renewed interest. The average price in the first quarter climbed to about USD 2,860 per ounce, nearly 40 per cent higher than a year earlier.
Central banks also continued to strengthen their gold reserves, adding 244 tonnes during the quarter. At the same time, demand for gold bars and coins remained strong, particularly in Asian markets, reflecting sustained retail investor interest.
However, the surge in prices began to affect consumer demand. Jewellery volumes fell sharply in the first quarter, as higher prices discouraged purchases.
Even so, the total money spent on gold jewellery increased, showing how rising prices, rather than higher volumes, were shaping the market.
This trend became even clearer in the second quarter. Total gold demand rose further to 1,249 tonnes, but the real highlight was the value of demand, which jumped to a record USD 132 billion.
Gold prices crossed fresh milestones, averaging over USD 3,280 per ounce in Q2. Investors continued to pour money into gold ETFs for the second consecutive quarter, driven by ongoing global uncertainty and gold’s growing appeal as a safe-haven asset.
Bar and coin investment also remained strong, making the first half of 2025 the best period for retail gold investment in more than ten years. Central banks added another 166 tonnes of gold in the second quarter, maintaining their role as a steady source of demand despite a slightly slower pace of buying.
Jewellery demand, however, weakened further across major markets. Volumes declined to levels close to those seen during the pandemic, although consumer spending rose across regions due to higher prices.
On the supply side, mine production reached a quarterly record in Q2, while recycling activity remained limited as households chose to hold on to their gold, expecting prices to rise further.
The third quarter marked a historic phase for the gold market. Total demand surged to 1,313 tonnes, the highest quarterly level ever recorded, while demand value climbed to an unprecedented USD 146 billion.
Gold prices hit 13 new all-time highs during the quarter, with the average price reaching around USD 3,457 per ounce.
Investment demand once again dominated the market. Gold-backed ETFs absorbed more than 220 tonnes in Q3, while bar and coin demand stayed above 300 tonnes for the fourth consecutive quarter, underlining strong and sustained investor confidence.
Central banks also stepped up their purchases, adding 220 tonnes of gold during the quarter.
Jewellery consumption continued to face pressure from record prices, posting another double-digit decline in volume. Still, spending on gold jewellery rose to USD 41 billion in value terms, highlighting the impact of higher prices.
By the end of the first nine months of 2025, global gold demand had reached 3,717 tonnes, valued at around USD 384 billion. The data clearly shows that 2025 was a year shaped by strong investor confidence and strategic central bank buying, while consumer demand adjusted to a new price reality.
As economic and geopolitical uncertainties persisted, gold once again proved its strength as a trusted store of value and a preferred safe-haven asset worldwide. (UNI)
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