The price of gold is rising. Why global demand for the precious metal has increased, while demand for jewelry has fallen

Gold is once again at the peak of its popularity in the global market. In 2025, prices for the precious metal continue to break historical records. What is behind this: investor emotions or fundamental reasons? UNN investigates.

As of early August 2025, the spot price of gold is approximately 134,480 hryvnias per troy ounce — an international unit for measuring the weight of precious metals, equal to 31.1 grams. This is equivalent to about 4,320 hryvnias per gram of the precious metal. Meanwhile, in December 2024, the average cost of gold was approximately 110,300 UAH per troy ounce. This means that the value of gold has increased by more than 20% in seven months.

Despite the fact that gold is usually perceived as an asset unaffected by inflation, the current price increase has a much broader basis and is much deeper than a reaction to economic turbulence.

According to data from the World Gold Council, global demand for gold reached 1,248.8 tonnes in the second quarter of 2025. This is 3% more than in the same period last year. However, the most interesting aspect is the structure of demand.

Investment demand for gold in the second quarter of 2025 increased by 78%, primarily due to significant inflows of funds into ETF funds and physical gold. For example, since the beginning of 2025 alone, over $8.5 billion has flowed into SPDR Gold Shares and other similar funds.

At the same time, the popularity of gold as a jewelry metal has significantly decreased, noted financial expert Olena Sosedka. She added that for many investors, gold is now an anti-crisis asset that acts as a financial "anchor" during periods of market turbulence.

Gold prices in the global market have become so high that it has reduced the popularity of buying gold jewelry. This has been most reflected in key markets such as India and China, but a global decline in demand is felt worldwide. Due to rising prices, former fans of gold jewelry are increasingly preferring other precious metals. Instead, gold is more often considered as a way to preserve capital in conditions of economic instability and high inflation. And not as an item for everyday use.

Several global factors can be identified for the increase in gold's value. Firstly, there is global geopolitical tension in Southeast Asia, Europe, and the Middle East, which stimulates demand for asset protection. Secondly, the fall in the dollar's exchange rate stimulates demand for gold from investors in other currency zones. Thirdly, central banks continue to purchase gold. In the second quarter of 2025, they acquired 166.5 tons of gold, which is 41% higher than the average level over the previous decade.

In addition, analysts at Goldman Sachs – one of the largest and most influential investment banks in the world – predict that if the dollar continues to fall and the global situation does not stabilize, the value of gold will reach $3,700 per troy ounce by the end of 2025.

Thus, the increase in the value of gold is not an accident or a temporary market reaction. It is a consequence of profound changes in the global economy, where investors are once again choosing gold as a reliable way to protect their capital in unstable times.

While economic uncertainty persists globally and the financial system tries to find a new equilibrium, gold remains a reliable and proven asset for both ordinary investors and central banks.