Last week was all about geopolitical tension over Greenland, which eased post Davos negotiations. US economic data signaled a healthy backdrop despite elevated inflation. Europe saw steady activity, Japan held rates but with a tightening bias, China’s recovery remained uneven.
Last week, global markets were shaped by steady US inflation, resilient consumer demand, and fresh tariff threats. Europe saw economic recovery; China’s GDP grew at 5% in 2025, matching its pre-set target; Japan called a snap election, and India saw inflation tick up and trade deficit widen.
The gold rally continues, driven largely by global uncertainty. Domestic demand remains resilient, supported by strong investment buying, while listed jewellery companies have reported healthy revenue growth in the October–December quarter. December witnessed unprecedented inflows into Indian gold ETFs, taking overall gold demand in 2025 to a historic high.
The RMB gold price recorded its strongest year since the SGE’s launch in 2002. Firm prices continued to attract inflows into gold ETFs in December, culminating in their best year on record. The PBoC also extended its buying streak to 14 consecutive months. However, weakness in the gold jewellery sector – despite a seasonal uptick in December – more than offset robust investment demand, weighing on overall wholesale gold demand in 2025.
In this episode of Unearthed, John Reade and Joe Cavatoni, Senior Market Strategists at the World Gold Council, kick off the new year with an update on the state of the gold market, exploring the factors influencing gold prices, including geopolitical tensions and ongoing economic conditions.
Last week’s data highlighted diverging global trends: the US saw softer labor and manufacturing but resilient services and improved sentiments; the Eurozone witnessed easing inflation and stronger retail sales; and in Asia, Japan’s consumption picked up, India’s growth outlook was upgraded, and deflation worries lingered in China.
The gold market faced significant developments throughout 2025 as participants responded to evolving drivers, including US tariff policies. After considerable uncertainty, the White House clarified that gold imported for investment purposes would be exempt from tariffs under the International Emergency Economic Powers Act (IEEPA).
Global gold mining has been stable in recent years. Despite short-term impacts stemming from the pandemic, safety stoppages and industrial action, mined gold production averaged a near zero annual y/y change between 2018 and 2024.
Central banks bought a net 45t in November, and while down slightly from October, buying has remained elevated compared to the earlier months of this year. National Bank of Poland led net buying for the second consecutive month after October’s resurgent buying from the bank.
Last week, US data showed strong jobs and housing trends amid a widening FOMC policy divide. In the Eurozone, inflation eased while manufacturing contracted. In Asia, China’s factory activity rebounded, yet India’s PMI hit a two-year low.
