Gold demand reached 1,249 tons in the second quarter of 2025, a 3 percent increase year-on-year amid a high price environment. Strong gold investment flows largely fuelled quarterly growth, as an increasingly unpredictable geopolitical environment and price momentum sustained demand, according to the World Gold Council’s Q2 2025 Gold Demand Trends report.
“Global markets have navigated a volatile start to the year marked by trade tensions, unpredictable U.S. policy shifts and frequent geopolitical flashpoints. The robust investment activity we have seen in the first half of 2025 underscores gold’s role as a hedge against economic and geopolitical risks,” said Louise Street, senior markets analyst at the World Gold Council.
Ongoing market volatility, coupled with gold’s impressive price performance in recent months, has also generated significant momentum, drawing capital from investors around the globe, Street added.
Global gold ETF demand hits first-half high
Gold ETF investment remained a key driver of total demand, with inflows of 170 tons over the quarter, compared with small outflows in Q2 2024. Asian-listed funds were major contributors at 70 tons, keeping pace with U.S. flows. Combined with record inflows in Q1, global gold ETF demand reached 397 tons, the highest first-half total since 2020.
The report also revealed that total bar and coin investment increased 11 percent year-on-year, adding 307 tons. Chinese investors led the way with a notable 44 percent year-on-year increase to 115 tons, while Indian investors continued to add to their holdings, totaling 46 tons in Q2.
However, divergent trends emerged in Western markets as European net investment more than doubled to 28 tons while U.S. bar and coin demand halved to 9 tons in the second quarter.
Central banks add 166 tons in Q2
Central banks continued to buy gold, albeit at a slower pace, adding 166 tons in Q2 2025. Despite this deceleration, central bank buying remains at significantly elevated levels due to ongoing economic and geopolitical uncertainty.
The World Gold Council’s annual central bank survey shows that 95 percent of reserve managers believe that global central bank gold reserves will increase over the next 12 months.
Mideast jewelry demand falls 11 percent
On the other hand, jewelry demand continued to decline, with the volume of consumption down 14 percent and nearing low levels last seen in 2020 during the COVID pandemic. Jewelry demand in China was down 20 percent and Indian demand fell 17 percent year-on-year. However, in value terms, the global jewelry market increased to a total of $36 billion.
“Middle Eastern gold demand in the second quarter broadly mirrored global trends. Jewelry consumption across the region declined 11 percent year-on-year, as elevated gold prices and ongoing geopolitical tensions weighed on consumer sentiment. A notable exception was Iran, where demand rose 12 percent as consumers turned to gold jewelry as a proxy investment,” said Andrew Naylor, head of Middle East and public policy at the World Gold Council.
Naylor also revealed that investment in gold bars and coins across the region rose 4 percent year-on-year, though this headline figure masks a more nuanced picture. In the UAE, investors sought safety in gold, driving demand up by 18 percent year-on-year. In contrast, some markets saw profit-taking as prices continued to climb.
“Looking ahead to the second half of 2025, gold should maintain its appeal across Middle Eastern markets—though continued price pressure could be a tailwind for consumer demand,” Naylor added.
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Gold prices rise 26 percent in H1 2024
“Gold recorded a remarkable 26 percent appreciation in the first half of the year in dollar terms, outperforming many major asset classes. With such an impressive start to the year, it is possible that gold could trade within a relatively narrow range in the latter half of 2025,” added Street.
On the other hand, the macroeconomic environment remains highly unpredictable, which may underpin further gains for gold. Any material deterioration in global economic or geopolitical conditions could further amplify gold’s safe-haven appeal, added Street, potentially pushing prices higher still.
