World Gold Council Q1/2025 Gold Demand Report ? Investment Surges, Jewellery Falters
Chris Thompson on 2025-06-25 16:51:37.0
On April 30, 2025, the World Gold Council released its ?Gold Demand Trends? report for Q1/2025. Gold demand edged up in the first quarter of 2025, reaching 1,206 tonnes. That's a 1% year-over-year gain and the highest Q1 figure since 2016. But more interesting than the total volume is where the demand came from, and where it didn't.
ETFs Lead the Surge
Investment was the big story. Exchange-traded funds brought in 226 tonnes after several quiet quarters. That swing helped drive overall investment demand up to 552 tonnes, up 170% from last year and the highest level since early 2022.
Why the jump? Uncertainty. Between U.S. tariffs, geopolitical tensions, and a choppy stock market, investors were looking for something solid. The weaker dollar didn't hurt either. Gold filled the role, and prices followed. The average gold price hit $2,860 an ounce in Q1, up 38% from a year ago.
Bar and coin buying also held up. China, in particular, saw strong retail demand, its second-best quarter on record. Global bar and coin purchases reached 325 tonnes, which is about 15% above the five-year average. India extended its streak too, marking a seventh straight quarter of growth, up 7% year-over-year.
Central Banks Still Buying, but Slower
Central banks kept adding to their gold reserves, though at a more modest pace. They bought 244 tonnes in the quarter, still within the usual range seen over the past few years. Poland stood out with a 49-tonne purchase, more than half of what it added in all of 2024. China added 13 tonnes, pushing its total to 2,292 tonnes.
Some banks may be slowing down just because they're getting close to their target allocations. But the broader trend, diversifying away from U.S. assets, doesn't seem to be going anywhere.
Jewellery Struggles in a High-Price Market
Not everyone was buying. Jewellery demand dropped 21% year-over-year to 380 tonnes, the lowest since COVID lockdowns in 2020. High prices were a major factor. Both India and China, which typically dominate the jewellery market, saw sharp declines, India down 25%, China down 32%.
Still, total spending on jewellery actually rose 9% to $35 billion. So, people were paying more, just getting less metal. In China, lighter styles gained traction. In India, weddings helped prop up demand, but general buying slowed.
Tech Demand Stays Flat
Gold use in tech didn't really budge, coming in at 80 tonnes. Electronics was up slightly, 2%, thanks to continued AI adoption and a few product launches in China. But with tariffs still a wild card, manufacturers are keeping an eye on margins. If prices hold or rise, they may start cutting gold content.
China saw a big swing toward investment and away from jewellery.
India had less jewellery demand, more bar and coin buying.
Middle East/Turkey felt the squeeze from political instability and high prices, though Saudi Arabia was an outlier thanks to festival spending.
U.S. and Europe saw weaker retail interest, but institutional investors stayed active.
On the Supply Side
Mine production hit a Q1 record of 856 tonnes. Not by much, but still a record. Ghana, Chile, and Canada helped lift the numbers, offsetting declines in places like Turkey and Australia.
Recycling, oddly enough, dipped 1%. That's despite prices hitting new highs. Maybe people are just waiting for even better prices before cashing in.
What's Next?
Hard to say. If risks stay elevated, investment demand could keep climbing. Jewellery probably stays under pressure if prices remain high. Tech demand is stable for now, but tariffs could shake things up. Mine output looks steady, and recycling won't likely spike unless prices shoot higher, or the economy takes a hit.
So, Q1 was kind of a split-screen: investors leaned in, consumers pulled back, supply kept pace. Whether that holds in Q2 depends on whether the world gets more predictable, or even less so.
FIGURE 2: Quarterly Gold Supply and Demand by Sector (Tonnes)
