WGC Report
Gold Demand Trends Q1 2025
Gold has ranked among the top-performing assets following the U.S. elections. It has appreciated by approximately 25% year-to-date.
This article provides a concise overview of the World Gold Council's newly released Gold Demand Trends report (Q1 2025), published yesterday, before delving into two critical components of the findings: central bank acquisitions and gold ETF activity.
Q1 gold demand (including OTC investment) rose 1% year-over-year to 1,206 tonnes – marking the strongest first-quarter performance since 2016.
Central bank purchases totaled 244 tonnes during the quarter, reflecting a moderation from Q4 2024 but remaining firmly within the typical quarterly range observed over the past three years.
Investment demand surged 170% year-over-year to 552 tonnes, driven by a sharp rebound in gold ETF inflows, reaching its highest level since Q1 2022. Retail investment in bars and coins held steady at 325 tonnes, staying 15% above the five-year quarterly average. China accounted for a significant portion of this growth, recording its second-highest quarterly retail investment volume on record.
Technology sector demand remained flat year-over-year at 80 tonnes. While AI-driven electronics demand provided stability, potential tariffs introduced uncertainty for the sector’s outlook in 2025.
Jewellery demand volumes plummeted to their lowest post-COVID levels due to record-high gold prices. However, consumer spending on jewellery in value terms climbed 9% year-over-year to US$35 billion, reflecting price-driven revenue growth despite lower unit sales.
CENTRAL BANKS
Central banks maintained robust gold demand in Q1, adding 244 tonnes to global reserves. While this marked a notable decline from the prior quarter, the absolute volume remained strong – 24% above the five-year quarterly average and only 9% below the three-year average, a period characterized by exceptionally high purchases.
Central banks persist in diversifying reserves by scaling back US asset holdings, with only a minor February increase. This trend is unlikely to reverse without a substantial easing of geopolitical risks. The IMF’s sharper downgrade of US growth forecasts compared to other major economies, attributed to policy unpredictability, implies potential negotiating leverage for other nations. However, such negotiations often span years rather than weeks, making near-term resolutions improbable.
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