WGC: Investment demand keeps gold in good shape
Global demand for gold increased by 16% in the first quarter of 2025 due to a surge in investment demand, which showed a three-year high amid significant inflows into exchange-traded funds backed by the precious metal, the World Gold Council (WGC) reports.
At the same time, demand for jewelry continued to decline due to rising global gold prices, technological demand stagnated compared to a year earlier, and central banks reduced purchases in reserves, but still remain net buyers, despite price dynamics.
Jewelry consumption of gold decreased in volume amid record prices. At the same time, the value of purchased products increased by 9% year-on-year to $35 billion. All markets showed a decrease in tonnage, while the cost increased everywhere.
China, as a key consumer market, showed a five-year low among the first quarters in the first quarter of 2025, as well as a decrease of 19% compared to the 10-year quarterly average. At the same time, the first quarter has traditionally remained the best for the jewelry market, despite the fact that in value terms demand decreased by 6% to $ 12 billion.
"As the price set more and more records, consumers decided to keep their budgets on hold or buy lighter, more affordable jewelry. In the face of uncertainty in the market, retailers have taken a cautious approach to sales before the Chinese New Year, leaving most of the goods in stock," the council noted.
Experts expect that by the end of the year, affordability will remain a key factor influencing the consumption of gold jewelry. "If the price remains high in the second quarter, which is traditionally not a high season for expensive jewelry, and economic development slows down, then demand in tons will decrease even more," the WGC believes.
In India, price was also a key factor in the decline, but in terms of cost, demand increased by 3%. This is despite the fact that the quarter showed the lowest level of demand since the third quarter of 2020.,
In the United States, demand for gold jewelry decreased by 5%, but was 32% higher in monetary terms — $2 billion.
INVESTMENT Demand has reached a three-year high due to the rapid influx of ETFs and stable demand for bullion and coins.
In the first few weeks of the second quarter, there was continued demand in global ETFs, especially in Asia, where flows have already exceeded their total volume of incoming gold for the entire first quarter.
"If the trend continues at the current level throughout April, we will see the highest three-month consecutive inflows since the COVID outbreak pushed investors towards gold in 2020, especially given that the assets