Gold's escalating prices ignite unprecedented investment demand in Q2, as indicated by the World Gold Council's report.
In the second quarter of 2025, the global gold demand reached a staggering $132 billion, marking a new record high. The World Gold Council (WGC) attributes this surge to strong investment flows, particularly into gold exchange-traded funds (ETFs), which saw inflows of 170 metric tons in the quarter.
Gold ETF investment was the main component driving total demand growth, reaching record inflows for the first half of 2025, the highest since 2020. Asian-listed and U.S. funds were major contributors to this surge.
Investments in gold bars and coins also increased by 11% year-over-year, led by notable growth in China and continued additions in India. Central banks continued to buy gold at elevated levels, adding 166 tons in Q2, although at a slower rate compared to prior quarters.
While jewelry demand fell sharply in volume terms due to record high gold prices, overall investment demand (ETFs, bars, and coins) rose 78% year-on-year, underpinning the record value of demand.
The WGC expects investment demand to remain firm in the second half of 2025, though possibly at a slower pace due to short-term dollar strength and resilient equity markets. Lower interest rates, expected to begin in Q4, could reignite investment demand for gold.
Trade tensions, particularly the extension of US tariff uncertainties through August, negatively impacted East Asian manufacturing sentiment. However, gold used in AI-related technologies remained an area of strength, partially offsetting the decline in electronics applications.
Recycling activity increased by 4% to 347 metric tons in Q2 2025, the highest for any Q2 since 2011. The average gold price in Q2 2025 was the highest ever recorded in a quarter, with prices soaring to an average of US$3,280.35 per ounce, resulting in a 45% surge in value terms compared to Q2 2024.
In value terms, jewellery demand rose 21% year-on-year to US$36 billion in Q2 2025. Despite the decline in volume terms, global jewellery consumption stood at 341 metric tons.
Gold mine production reached a new Q2 record of 909 metric tons in Q2 2025. Total gold demand by volume rose 3% year-on-year to 1,249 metric tons in Q2 2025. Total gold supply in Q2 2025 increased by 3% year-on-year to 1,249 metric tons.
In conclusion, strong investor interest in gold ETFs was the primary factor behind the record $132 billion global gold demand in Q2 2025, amid high prices and global economic and geopolitical uncertainties. The WGC believes that lower interest rates could lead to increased investor interest in gold from an opportunity cost perspective.
Finance played a significant role in the increased gold demand, as investments in gold ETFs and other forms of gold investing reached record inflows in the first half of 2025. The business sector, specifically, Asian-listed and U.S. funds, contributed significantly to the surge in gold ETF investment.
