World Gold Council: Global gold demand surpasses 5,000 tons for the first time, with retail and institutional investors as the main buyers.

The World Gold Council released a report on Thursday showing that global gold demand will surpass 5,000 tons for the first time in 2025, reaching a record high of 5,002 tons. Investment demand has replaced jewelry consumption as the largest source of demand, with individuals and institutions becoming the dominant force in gold purchases.

Central banks' gold purchases slowed by one fifth to 863 tons, lower than the annual purchase level of over 1,000 tons from 2022 to 2024. Meanwhile, investment demand surged by 84% to a record 2,175 tons, including an increase of 801 tons in gold ETF holdings, ending four consecutive years of outflows. Bar and coin purchases jumped 16% to 1,374 tons, hitting a 12-year high.

John Reade, Chief Strategist of the World Gold Council, said:

Central banks may have played a very important role in this trend in 2022 and 2023, but now other factors have come to dominate. This year, the biggest question will be whether investment demand can remain strong enough to sustain the strength of the gold market.

This shift in demand structure comes as gold prices repeatedly hit new highs. In 2025, gold prices recorded the best annual performance since 1979, rising 64% for the year and breaking historical records on 53 trading days. On Wednesday, gold prices surpassed $5,300 per ounce for the first time, rising 22% so far this year. The total value of global gold demand soared to $555 billion, up 45% year-on-year.

Explosive Growth in Investment Demand Reshapes Market Structure

The explosive growth in investment demand in 2025 has thoroughly changed the demand structure of the gold market. Total investment demand surged by 84% to a record high of 2,175 tons, surpassing jewelry consumption for the first time to become the largest demand category.

Gold ETFs saw an inflow of 801 tons in 2025, making it the second-highest annual increase in history, reversing the four-year outflow from 2021 to 2024. Bar and coin purchases reached 1,374 tons, the highest in more than a decade. Demand in China and India was particularly strong, with retail investment demand in China surpassing jewelry consumption for the first time.

In addition to falling interest rates and tariff-induced turmoil, the weakening confidence in major developed market currencies has been a key catalyst for the surge in investment demand. Attacks on central bank independence and rising sovereign debt have weakened investors' confidence in major currencies, driving funds into gold as a safe haven.

Central Bank Gold Buying Slowing but Still Historically High

Central banks and other sovereign institutions bought 863 tons of gold in 2025, down 21% from the previous year, and below the astonishing annual purchases of over 1,000 tons from 2022 to 2024. The World Gold Council expects central bank purchases to edge down further to 850 tons in 2026.

Although the pace of gold buying has slowed, it remains high by historical standards. Massive gold purchases by central banks in 2022 and 2023 were a key factor driving gold prices to double over more than three years. The World Gold Council noted that, following the gold price rally and active central bank buying from 2022 to 2025, the share of gold in global foreign exchange reserves is now approaching levels seen in the early 1990s.

According to the report, most of the central bank purchase activities were not disclosed and therefore not included in published statistics. The World Gold Council estimates are based on officially reported central bank purchases as well as Metals Focus consulting assessments of unreported purchase volumes. The report adds, "Many central banks manage gold outside their formal reserve frameworks, and some may target quantity rather than value, which makes defining a single 'saturation point' for total demand invalid."

Soaring Gold Prices Hit Jewelry Demand Hard

The continued rise in gold prices has had a significant impact on jewelry demand. Global demand for gold jewelry dropped nearly one fifth to 1,542 tons in 2025, with the Chinese market down 24% to its lowest level since 2009. The World Gold Council expects record-high gold prices to continue to suppress jewelry demand in 2026.

Despite falling demand, global gold jewelry value still grew 18% year-on-year, reaching a record $172 billion thanks to rising gold prices, indicating that global consumer interest in gold jewelry has not completely faded. As gold prices rise and economic uncertainty persists, investors are increasingly favoring gold bars over jewelry.

On the supply side, mine gold production increased 1% to 3,672 tons, while recycled gold supply rose 3% to 1,404 tons. Despite fluctuations in the consumer electronics sector, gold demand for technology remained stable in 2025, benefiting from continued growth in AI-related applications.

Record high gold prices may pose pressure on some demand categories. The World Gold Council expects jewelry demand to remain weak in 2026, and central bank gold purchases to decrease slightly. Whether the market can remain strong depends on whether retail and institutional investors' safe-haven demand continues to offset the slowdown in other areas.

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