Quarterly gold demand rose 1 percent to 1,206 tons during the first quarter of 2025 despite a record high price environment

Global gold demand rose 1 percent during the first quarter to 1,206 tons 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.

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 drove much of the global demand for bar and coin, which saw volumes rise 3 percent year-on-year to 325 tons during Q1. This strength was largely driven by a surge in retail investment in China, which saw its second-highest quarter on record.

However, Western appetite weakened, with U.S. demand dropping 22 percent year-on-year, rolling over sharply from a very high Q1 2024, while Europe saw a modest 12-ton recovery, also 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, having added 244 tons to global reserves in Q1. While this level of demand was 21 percent lower than the same period last 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.

“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, we expect investment interest across the region to stay firm in the months ahead