Gold demand in the first quarter of 2025 reached its strongest opening-quarter level since 2016, totaling 1,206 tonnes, a modest 1% increase compared with the same period a year earlier. This outcome reflects a mix of investor appetite, central bank activity and steady retail purchases, even as certain end-use categories adjusted to higher prices and global economic shifts.
The primary driver of the quarterly rise was a surge in investment demand, led by significant inflows into gold exchange-traded funds (ETFs). Investment demand climbed 170% year over year to 552 tonnes, marking the largest quarterly investment total since Q1 2022. ETF inflows were the dominant contributor to that increase, as investors sought exposure to gold for diversification and as a hedge against market uncertainty.
Central banks continued to add to their official gold reserves, buying 244 tonnes during the quarter. This sustained buying behaviour is consistent with banks’ strategies to diversify foreign-exchange holdings and strengthen reserve portfolios, and it helped underpin global demand even as other segments of the market showed mixed trends.
Retail demand for physical gold—bars and coins—remained robust, particularly in China. Retail purchases reached 325 tonnes, about 15% above the five-year average. The elevated retail flow indicates persistent consumer interest in physical gold as both a savings vehicle and a cultural store of value, despite higher nominal prices.
Demand from the technology sector held steady at around 80 tonnes. The sector has benefited from growth in areas such as artificial intelligence and related hardware, which require specialized components using precious metals. However, technology demand faces potential headwinds from tariff uncertainty and shifting supply-chain dynamics that could affect production costs and demand patterns over time.
Higher, record-setting gold prices weighed on jewelry consumption. Jewelry demand fell to its lowest level since the global lockdowns of 2020, as elevated prices discouraged volume purchases. Nevertheless, the value of consumer spending on gold jewelry rose: consumers spent approximately US$35 billion in value terms, a 9% increase versus the prior year. That divergence—lower physical volumes but higher spending—reflects consumers buying fewer pieces or smaller weights while paying higher prices per gram.
Overall, the Q1 2025 picture shows a market where investment and official-sector demand offset weakness in some traditional end uses. ETF inflows and central-bank purchases were central to the quarter’s strength, while retail interest in bars and coins, notably in China, remained an important support for total demand. Technology demand held its position, and jewelry shifted toward higher-value spending despite reduced volumes. These dynamics together produced the strongest first-quarter gold demand since 2016, highlighting gold’s continuing role across investment, sovereign reserve and consumer channels.