• Global gold demand soared to a record 1,206 tonnes in Q1 2025, driven by China leading as the top buyer of gold bars and coins
• ETF inflows propelled total investment demand to 552 tonnes, a 170% year-on-year increase
• Central banks purchased 244 tonnes of gold, signalling steady institutional confidence in gold as a reserve asset

Harare- Global gold demand soared to a record 1,206 tonnes in the first quarter of 2025, the highest Q1 figure since 2016, driven by a 1% year-on-year increase that included over-the-counter (OTC) investment.

Gold prices surged 40%, with the LBMA (PM) gold price averaging US$2,860 per ounce, a 38% year-on-year rise.

This rally was fuelled by surging exchange-traded fund (ETF) inflows, geopolitical uncertainty, US dollar weakness, stock market volatility, and concerns over US tariffs.

China emerged as a pivotal force, leading global demand as the top buyer of gold bars and coins while driving jewellery consumption to a remarkable US$35 billion in value, despite a sharp decline in volume.

The standout driver of gold’s performance in Q1 was a dramatic revival in ETF inflows, which propelled total investment demand to 552 tonnes, a 170% year-on-year increase and the highest since Q1 2022.

This influx reflects a renewed investor appetite for gold as a hedge against economic and geopolitical risks.

In contrast, OTC investment and stock changes recorded negative figures, suggesting a shift in investor preference from OTC markets to ETFs.

Institutional and high-net-worth investors continued to show robust interest in gold, but their activity was partially offset by adjustments in stock levels and a broader reallocation of capital.

Meanwhile, bar and coin demand remained strong at 325 tonnes, 15% above the five-year quarterly average, with China leading the charge through its second-highest quarter of retail investment.

Central banks also played a significant role in supporting demand, purchasing 244 tonnes of gold in Q1. While this marked a slowdown from the prior quarter, it remained well within the quarterly range observed over the past three years, signalling steady institutional confidence in gold as a reserve asset.

On the supply side, total gold supply grew modestly by 1% year-on-year to 1,206 tonnes, driven by a record Q1 mine production of 856 tonnes.

However, recycling activity dipped by 1%, as consumers opted to hold onto their gold in anticipation of further price gains.

This dynamic highlights a cautious approach among sellers, who are betting on continued price appreciation amid the volatile macroeconomic environment.

Despite the overall strength in demand, not all sectors performed equally.

Gold jewellery demand plummeted to its lowest level since the COVID-induced disruptions of 2020, as record-high prices deterred volume-based purchases.

However, in value terms, consumer spending on gold jewellery rose 9% year-on-year to US$35 billion, reflecting the impact of elevated prices on purchasing behaviour.

In the technology sector, demand held steady at 80 tonnes, with ongoing AI adoption driving growth in electronics. Nevertheless, uncertainties surrounding potential tariffs pose challenges for the sector’s outlook for the remainder of 2025, potentially constraining further expansion.

In value terms, total gold demand nearly matched the Q4 2024 record of US$111 billion, with a 40% year-on-year increase driven by the sharp rise in prices. This convergence of robust investment demand, steady central bank buying, and resilient retail interest in bars and coins shows gold’s multiple role as both a financial asset and a cultural staple.

However, the decline in jewellery demand and subdued recycling activity signal potential vulnerabilities in certain segments of the market.

Looking ahead, the interplay of geopolitical risks, tariff policies, and macroeconomic trends will likely continue to shape gold’s trajectory, with ETFs and central banks remaining pivotal to its sustained rally. For now, gold’s Q1 2025 performance reaffirms its status as a resilient and coveted asset in an increasingly uncertain world.