How Gold Demand Shifted in Q1 2025
In the first quarter of 2025, global demand for gold saw an increase in demand, driven by the revival of gold investment and a booming demand for coins and bars especially in China. Central banks continued to net-buy, however, demand for jewellery was impacted due to record high prices.
How Gold Demand Shifted in Q1 2025
The total Q1 demand for gold (inclusive the OTC investments) was up 1% in Y/Y terms at 1,206t, the highest level for a first quarter since the beginning of 2016.
Central bank gold purchased 244t of gold during Q1 which was a decrease from the prior quarter, however still within the range of quarterly prices of the past three years.
A dramatic rise in gold ETFs flows has resulted in a more than doubling of the total demand for investment to 552t (+170 percent year-over-year) the highest level since Q1'22.
Demand for coin and bar bars increased to 325t - 15% higher than the average of five years in a row. China is the primary driver behind the increase, registering its second-highest retail investment quarter.
Demand for technology of 80t was stable year-over-year. Intense AI adoption led to steady growth in the electronics industry, however the uncertainty about tariffs creates an uncertain situation for the rest this year.
Demand for China jewellery dropped sharply in the current record-high price environment the volume of sales fell to their lowest levels since the COVID stopped the demand in the year 2020. In terms of value, consumers' spending on gold jewelry increased by 9% year-on-year to reach US$35 billion.
As per experts' estimates, the market for gold is booming with excitement during the occasion of Akshaya Tritiya, which holds an immense significance for the culture of India and is traditionally a time to witness the beginning of a boom in gold purchases.
Gold price has forced consumers toward lighter, smaller pieces, while some are putting off purchases in hopes of price reductions.
Experts believe that, although the current China investment could prompt people to be cautious but the cultural importance that gold has during Akshaya Tritiya as well as its long-standing reputation as a solid asset, indicates that it will continue to enjoy positive buying momentum gold, they stated.
