Global demand for gold, including over-the-counter (OTC) trading, increased by 3% year-on-year to 1248.8 tonnes in the second quarter of 2025, with investments rising by 78%, the World Gold Council reported on Thursday, writes UNN with reference to Reuters.
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Spot gold prices have risen by 26% since the beginning of the year, reaching a record $3500 per troy ounce in April. This is due to global trade policy uncertainty and geopolitical instability, which have contributed to inflows into safe-haven assets.
Demand for gold bars rose by 21% in the second quarter, offsetting a continued decline in demand for coins, the WGC, an industry organization whose members include gold miners from around the world, reported.
Gold-backed exchange-traded funds recorded their largest half-year inflow of funds since the first half of 2020 from January to June, the WGC reported earlier in July.
Global gold jewelry consumption, a major category of demand for the physical metal, fell by 14% to 341.0 tonnes, the lowest since the pandemic-hit third quarter of 2020, as high prices deterred buyers.
"Most of the decline was due to China and India, whose combined market share fell below 50% for only the third time in the last five years," the WGC reported.
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Central banks, another important source of gold demand, reduced purchases by 21% to 166.5 tonnes in the second quarter, according to WGC calculations based on reported purchases and estimates of unregistered purchases.
Regarding supply, recycling volumes increased by 4% to 347.2 tonnes in the second quarter, but remained relatively subdued despite record prices, as Indian consumers preferred to exchange old jewelry for new or use it as collateral for loans.
The WGC lowered its estimate for central bank gold purchases this year, adding that the long-term trend of central banks reallocating funds from US assets to gold continues.
According to the WGC, gold ETFs have additional upside potential in the second half of this year, while retail investments are expected to decline slightly.
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