Gold Demand Trends: Q4 and Full Year 2025

Tense geopolitics look set to be a major contributor to gold’s fortunes again in 2026, supporting a continuation of elevated central bank demand, strong gold ETF inflows, and robust bar and coin demand. Jewellery weakness is likely to persist and a strong recycling response seems unlikely.

• Bond market uncertainty, expected policy rate cuts and pressure on the US dollar are likely key factors supporting continued strength across gold investment sectors
• Jewellery spend should remain healthy, absent economic shocks, but tonnage demand will likely experience similar weakness to 2025
• Central bank demand is expected to be solid at levels close to those in 2025
• Mine supply and recycled gold are likely to reach similar levels to last year, with miners incentivised by high margins and recycling firm but constrained.

Investment

Geopolitics will be key to investment in 2026, raising risk premia across the board (Chart 3). In an increasingly polarised world, there is little reason to expect this to compress.¹ Alongside a broad set of drivers as per our 2026 outlook, gold’s appeal as an all-weather hedge relative to fixed income should continue to attract material investor demand into 2026, and possibly beyond. 

North American gold ETF demand had an exceptionally strong 2025, but the cumulative flows remain modest compared to past surges, and holdings remain low relative to other assets. In addition, Asian demand is only beginning to scale and European holdings are well below previous peaks, providing plenty of capacity to add. The short-to-medium-term backdrop is broadly supportive of continued solid demand:

• Real rates are falling (US 2-year TIP yield is already down almost 20bps in 2026)
• Credit spreads remain near historic lows while bond volatility is threatening to rise
• Equities are priced for perfection
• The US dollar remains expensive on a Real Effective Exchange Rate (REER) basis
• Geopolitical risk remains elevated
• Central banks provide an anchor for sustained buying.

European investment appetite – previously a laggard – is improving (Chart 4). Bar and coin demand surpassed the US in 2025, yet ETF flows remain muted compared with US buying.

Our model suggests that renewed credit concerns, lower interest rates, or meaningful inflation surprises could accelerate demand further.

Indian bar and coin demand and local ETFs should remain strong in 2026. Equities may stay subdued and less attractive amid high valuations, tariffs, and foreign outflows. A gradual shift from jewellery to pure investment demand should continue to support bars and coins.

Chinese bar and coin demand should benefit from price momentum, potentially lower rates, regional tensions, a similar shift from jewellery to investment as in India, and ongoing weakness in the property sector. Chinese gold ETFs similarly appear positioned for continued accumulation on these same drivers.

OTC demand, though harder to track, appeared healthier in 2025 than headline data might suggest given residual errors and stock movements. From what we hear in our market interactions, demand remains robust and going forward we would assume from first principles that it will be driven by similar factors and in the same direction as other sectors of investment.

COMEX managed money futures positioning bucked the trend in 2025, falling by 173t. This may reflect a shift toward more strategic physical holdings. But a higher base price and volatility in Q4 may have caused some speculators to reduce position sizes. Regardless of motivation, current positioning leaves room for inflows and reinforces a broader pattern: extended net longs have been poor predictors of price direction, unlike extended net shorts.²

Nonetheless, it is worth flagging that with price momentum as strong as it is, the risk of a pullback in investment on profit-taking remains a distinct possibility.

Fabrication

In China, new VAT regulations added pressure to an already soft jewellery market, but that drag could fade in 2026. Jewellery demand – overtaken by retail investment for the first time – is at a relative low. Assuming more moderate price gains than last year, 2026 may mark a bottom, with a flat year most likely.

China was also the main contributor to higher recycling volumes. High price sensitivity, store closures, and de‑stocking all contributed. Early 2026 data shows a seasonal rebound, though still below past surges. Importantly, spending values remain healthy, suggesting no demand destruction. A modest recovery is plausible as consumers acclimatise to higher price levels, though another year of outsized price gains would constrain this.

India’s experience has been similar. Jewellery demand remained strong in value terms, but higher prices prompted a shift toward lower-weight products. The key difference is macroeconomic: India’s stronger outlook should support demand more consistently than in China.

The global jewellery slowdown underscores widespread price sensitivity despite divergent economic conditions. Technology demand remains broadly stable but faces secondary pressures from AI-related bottlenecks as well as US tariffs, both of which are likely to persist into 2026.

Central banks

Forecasting the next phase of central bank buying is inherently difficult. Our Central Bank Survey results are now seven months old, and prices have shifted meaningfully and intentions therein are perhaps giving less of a steer now than post publication. Many banks manage gold outside their formal reserve frameworks; some likely target volumes rather than values. This makes it ineffective to identify a single ‘satiation point’ for aggregate demand.

IMF COFER data offers a clearer anchor: global gold holdings as a share of FX reserves are only now approaching early‑1990s levels (Chart 5) – a period with more concentrated ownership and arguably fewer incentives for gold ownership than today. Our survey work remains highly valuable in gauging strategic appetite and continues to complement other institutional efforts.

Supply

Producers have been focused on full price exposure with little appetite for hedging. Gold miners also had a stellar 2025. A median expectation for a price drop may, however, incite some increased caution.³ Hedging behaviour has been shifting toward put buying instead of call selling – albeit still somewhat marginal – suggesting that miners want to retain upside exposure with an element of downside protection. But we maintain that expanding production beyond current levels will be challenging.

Recycling

Recycling responses differ across regions. Over the long run, recycling tracks consumer demand and the stock of available material. In the short run, price is the dominant driver, with economic distress only meaningfully affecting behaviour during major downturns such as the Asian Financial Crisis or the Global Financial Crisis. 

The surprisingly muted response to the gold price surge has been explained by consumers having no need to sell (no economic distress) or little willingness to sell (amid expectations of continued price appreciation), alongside India’s penchant for trade-ins and collateral-based buying. 

Chart 6 shows how muted the recycling response has been over the past four years compared to the prior two decades. And this drop in sensitivity holds, when accounting for price expectations and measures of economic distress. It is possible that a geopolitical risk premium has imbedded itself in a reluctance to sell, in the same way that it is likely a key factor driving demand. However, a significant deceleration in economic growth may push some consumers to sell gold to meet their needs.