Quarterly gold demand rose 1 percent to 1,206 tons during the first quarter of 2025 despite a record high price environment in which gold surpassed $3,000/oz.
“It’s been a bumpy start to the year for global markets as trade turmoil, unpredictable U.S. policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors. In this context, investment demand for gold has paved the way for the highest level of first-quarter demand since 2016,” stated Louise Street, senior markets analyst at the World Gold Council.
Investors return to gold ETFs
The World Gold Council’s Q1 2025 Gold Demand Trends report revealed that the gold ETF revival fuelled a more-than doubling of total investment demand to 552 tons, a 170 percent year-on-year increase and the highest since Q1 2022. ETF inflows accelerated around the world, totalling 226 tons in the first quarter, as price momentum and tariff policy uncertainty drove investors to gold as a safe haven.
“Over the past 10 months, investors have returned to gold ETFs, ramping up their allocations since Q3 last year, and 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 percent below their 2020 high,” added Street.
Eastern investors drive bar and coin demand
Total gold bar and coin demand increased 3 percent year-on-year, remaining high at 325 tons during Q1. The World Gold Council attributed this increase to a surge in retail investment in China, which posted its second-highest quarter on record.
In fact, Eastern investors drove much of the global demand for bar and coin, offsetting Western weakness as appetite in the U.S. dropped 22 percent year-on-year, alongside a modest 12-ton recovery in Europe, but from a very low base in the same quarter last year.
In addition, central banks are now entering their 16th consecutive year of net-buying, adding 244 tons to global reserves in Q1 amidst ongoing global uncertainty. While this level of demand was 21 percent lower year-on-year, it remains robust and in line with the quarterly average for the last three years of sustained, strong buying.
Middle East gold demand remains resilient
Demand in the Middle East eased by 5 percent, with strong growth in Saudi Arabia offsetting sharp declines across much of the region. The gold price was responsible for the bulk of the regional drop in jewellery volumes, with continued added pressure in the UAE from the cut in Indian import duty, which has hit Indian tourist demand. Saudi Arabia, however, bucked the trend as consumer sentiment during the Eid festival was buoyed by the rising price, and festive demand was strong.
“Gold investment demand in the Middle East remained resilient in Q1 2025, underpinned by continued geopolitical uncertainty and positive price expectations. Notably, Saudi Arabia saw a 15 percent year-on-year increase in bar and coin demand, while jewellery demand in the Kingdom rose 35 percent – bucking regional trends,” stated Andrew Naylor, head of Middle East and public policy at the World Gold Council.
Naylor added that despite broader declines across the region, these figures highlight gold’s enduring appeal in the Gulf as both a store of value and a culturally significant asset. As the economic environment remains volatile, the World Gold Council expects investment interest across the region to stay firm in the months ahead
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Jewellery demand impacted by 20 all-time price highs in Q1
Unsurprisingly, gold jewellery demand was negatively impacted as gold hit 20 all-time price highs in Q1. Volumes reached their lowest point since demand was stifled by the COVID pandemic in 2020. However, the jewellery market remained relatively resilient, especially in value terms, given extreme price pressures.
The first quarter saw a 9 percent year-on-year increase in consumer spending to $35 billion, with every market except China seeing an increase in the value of gold jewellery demand.
Meanwhile, total gold supply was relatively flat year-on-year, at 1,206 tons in the first quarter, as record Q1 mine production was offset by slightly lower recycling. Technology demand was also stable at 80 tons, compared to Q1 2024.
“Looking ahead, the broader economic landscape remains difficult to predict, and that uncertainty could provide upside potential for gold. As turbulent times persist, safe haven demand for gold from institutions, individuals and the official sector could climb higher in the months to come,” added Street.
