Gold Demand Trends: Q1 2025

Gold’s price rise dominated headlines in recent months as it repeatedly set new record highs. The latest leg of the uptrend was set in motion by a pick-up in investment flows in January, initially sparked by US tariffs and cemented by concerns over erratic and unpredictable US policy announcements, fears of stagflation and/or recession, continued geopolitical jitters and the consequent turmoil in equity markets of such an uncertain environment. 

All this has focused attention on gold’s diversification benefits, with investors from across the spectrum – small individuals to high net worths to institutions – recognising the need for a safe-haven allocation. The strength of the price rally itself helped to drive further momentum in investment flows. 

Global gold-backed ETFs witnessed a broad-based revival, with investors from across the world adding significantly to their holdings. This has been replicated in investment interest for gold bars and coins, with very few markets witnessing a decline in holdings.

Anecdotally, high net worth and institutional investment flows remained positive. These are captured in our OTC and stock flows figure, which also reflects any statistical residual from the balance of other demand and supply estimates. This balance shows a negative print for Q1, which may seem counter intuitive at first glance. We believe it is likely explained by a variety of factors, including a shift in investor interest from OTC to gold ETFs; effects from the relocation of gold stocks across borders; as well as higher-than-usual uncertainty in some of these estimates given their significant magnitude. Shifts in positioning on COMEX can also be reflective of investment in this category and net long managed money futures positioning witnessed a 75t decline over the course of the quarter.¹ This may have been replicated elsewhere by investors who were quick to go long gold early in the quarter, then sought to unwind some of these positions as the price rose.

The dynamic pace of change in the gold market in Q1 makes for a challenging environment in which to identify various supply and demand flows, and this may make some of the data more susceptible to future revisions.

ETFs

Gold ETFs saw a striking start to the year: holdings increased by 226t during Q1. This took collective holdings to 3,445t, the highest since May 2023 but still well below their historical peak from November 2020 of 3,929t. 

In US-dollar terms, demand of US$21bn was the second highest quarterly inflow on record, only outdone by the US$24bn inflow set in Q2’20. Consequently, total AUM reached an all-time high of US$345bn by quarter-end, aided by the surging gold price. 

Global demand for ETFs – which has been positive in 10 out of the last 12 months – accelerated in Q1. Already encouraged by gold’s price momentum, investors spooked by somersaulting US tariff policy rushed for the safety of gold. 

North American-listed funds attracted the highest inflows in Q1 (+134t) as stock market volatility, combined with fears of stagflation, further highlighted the investment case for gold. 

The prospect of further ECB rate cuts added to the gold-positive environment in Europe: regional-listed funds added 55t during the quarter. 

Asian-listed funds were a stand out, rising by 34t in Q1. The bulk of this demand was for funds listed in China, given the escalating domestic threat of a trade war with the US. India also showed strong growth: holdings increased by 11% over the period.

Funds listed in Other regions added a relatively minor 4t, with Australia registering the most significant increase, up almost 3t. 

The first few weeks of Q2 have seen an acceleration in demand for global gold ETFs, most notably in Asia, where flows have already surpassed their Q1 total. Should demand continue at the current pace throughout April, we could see the strongest three-month consecutive run of inflows since the outbreak of COVID drove investors to gold in 2020, particularly as holdings still remain round 10% below the record high reached during that period.

For a detailed review of regional gold-backed ETF flows, please see our ETF Flows Commentary.

Bar and coin

Investment demand for gold at the retail level posted a healthy 3% y/y increase in Q1. At 325t, bar and coin demand was in line with the prior quarter and 15% above the five-year average. 

Gold’s stellar price run was the key driver of investment growth. Momentum took the price to 20 new record highs during the quarter, garnering global media attention and encouraging investors to ratchet up their future price expectations. This had a twofold impact: it encouraged fresh buying by investors keen to capitalise on further expected gains, and discouraged selling by investors who chose to wait for higher levels before taking profits.

A generally weaker US dollar in Q1 slightly tempered gold’s price rise when measured in other currencies, although price strength remained impressive across the board. 

China

Demand for gold bars and coins in China surged in Q1 to 124t (+12% y/y; +48% q/q) – its second strongest quarter on record. This performance was particularly impressive given the y/y growth is built on an already-strong Q1 2024. In volume terms, China was by far the largest contributor to the global y/y rise, accounting for 38% of total Q1 bar and coin investment.

The record-shattering gold price rally has been key in pushing up bar and coin demand during the quarter. With local assets – such as equities and bonds – underperforming, investors flocked to gold for returns.

Meanwhile, the escalating trade tension between the US and China, alongside expected currency depreciation, also drove safe-haven demand for gold; this was further encouraged by continued announcements of buying by the PBoC. 

We expect gold investment demand to stay robust in Q2 as trade tensions, economic growth concerns and rate cut expectations continue to enhance its investment appeal. 

India

Bar and coin demand in India saw its seventh consecutive quarter of y/y growth, increasing 7% to 47t. This was sharply lower compared with the previous two very strong quarters, but Q1 typically sees a drop compared with wedding- and festival-driven fourth-quarter buying.

The heightened investment interest was largely driven by local prices approaching the key psychological level of Rs100,000/10g, and boosted yet further by a number of regional festivals during the quarter.  

Despite the healthy macro backdrop, domestic equity markets corrected lower during the quarter, which likely encouraged some rotation into gold. 

Gold investment sentiment remains positive in India. The quarter’s strong bar and coin demand, coupled with inflows into gold ETFs and the reluctance of Indians to sell their existing gold, is indicative of continued healthy investment demand. Gold price expectations remain bullish, particularly in an environment of uncertain global geopolitics and underwhelming performance from other domestic assets. Meanwhile, the prospect of a normal monsoon bodes well for rural investment demand later in the year.

Middle East and Turkey

In Turkey, Q1 investment demand of 20t was down sharply from the very high Q1 2024, and below the prior quarter. Interest rates remained high, despite being eased during the quarter, and this attracted investment funds into savings accounts and away from gold. 

Investment demand remained elevated in the Middle East region, hovering just above the average level of the last three years.

Growth was concentrated in Saudi Arabia (driven by positive price expectations) and Iran (due to currency depreciation, high inflation and concern over unpredictable US foreign policy). This outweighed declines in the UAE, where higher prices curbed volumes, and in Egypt, where relative economic and currency stability diminished safe-haven investment flows. 

The West

Quarterly bar and coin investment in the US dipped to its lowest level for almost five years on continued profit-taking. In value terms, Q1 investment was higher y/y at US$1.5bn, but below the average quarterly US$1.6bn that has typified the last three years. This is not altogether surprising given that, historically, Republican presidencies have generally resulted in lower retail demand; however, fieldwork suggests that investment interest picked up late in the quarter and continued through early Q2 as tariff announcements dominated headlines. Meanwhile, high net worth investor demand – mostly captured through OTC investment – apparently remains contrastingly elevated. 

Gold investment in Europe staged a strong y/y recovery, albeit from a very low base. Demand jumped to 26t, largely due to growth in German-speaking markets. Price expectations have been revised higher on the back of gold’s remarkable run, encouraging fresh investors while simultaneously slowing profit-taking. In this high-price environment, smaller investment pieces (in denominations from 1g to 20g) saw the best growth, particularly in light of the limits on anonymous cash transactions (in Germany, for example, cash transactions of more than €2,000 require ID). 

Investment in the UK has been boosted by demand for CGT-compliant gold in light of last year’s budget changes to CGT thresholds. 

ASEAN markets

Investment was generally stronger y/y among the ASEAN markets covered in this report. Vietnam was the exception, where limited availability of gold products pushed up premiums. Currency depreciation further exacerbated the rise in the US dollar price of gold, which impacted affordability.

Safe-haven demand for gold as a hedge against inflation, currency depreciation and geopolitical risk drove the y/y improvement in Indonesian investment. In Thailand, positive price expectations underpinned gold investment, although demand here halved from the previous quarter as the gold price rally drew out profit-taking.

Rest of Asia

Profit-taking and fresh investment in Japan broadly balanced out in Q1. Given the historical tendency for Japanese investors to take profits on price rallies, it was notable that demand was not negative despite the unprecedented price level. As well as a continuation of the recent interest in gold among younger investors, fieldwork suggests that older investors were also buying into the gold rally during the quarter. 

Investment in South Korea jumped to the second highest quarter in our data series as domestic political and economic instability sparked safe-haven demand. Coupled with supply constraints, this caused domestic gold premiums to surge.

Australia

Bar and coin investment jumped sharply, in response to both the gold price rally and a February rate cut by the Reserve Bank of Australia. A further boost came from rising safe-haven demand amid notable equity market weakness.²