ETF Inflows Boost Q2 Gold Demand, World Gold Council Says

Global Gold Demand Rises 3% in Q2 2025 as ETF Inflows Offset Weak Jewellery Sales

The World Gold Council reported that global gold demand, including over-the-counter trading, increased by 3% year‑on‑year to 1,248.8 metric tons in the second quarter of 2025. The modest overall rise masks divergent trends across key market segments: a sharp surge in investment demand driven by exchange-traded fund (ETF) inflows, a notable decline in jewellery consumption, and a pullback in central bank buying.

Investment demand climbed by 78% in Q2 as ETFs recorded their largest semi-annual inflows since 2020. That influx of investment capital helped absorb supply and supported the overall increase in demand despite weakening appetite elsewhere. Exchange-traded funds have become an increasingly important channel for investors seeking exposure to the gold market, offering liquidity and ease of access that play a decisive role in short- and medium-term price dynamics.

By contrast, jewellery demand fell by 14% year‑on‑year, pushed lower by elevated prices. High retail and wholesale gold prices discouraged purchases among consumers in major jewellery markets, particularly China and India, where affordability is a key determinant of seasonal and festival-related buying. The decline left global jewellery demand at its lowest level since late 2020, underscoring how price sensitivity in end-user markets can quickly reshape consumption patterns.

Central-bank activity also contributed to the mixed picture. Official sector purchases declined by 21% during the quarter yet remained sizable at approximately 166.5 metric tons. Central banks continue to be meaningful participants in the gold market, and even with reduced quarterly buying they maintained a significant footprint in reserves accumulation and portfolio diversification strategies.

Taken together, these developments highlight a market shaped by contrasting forces: robust investor interest via financial vehicles such as ETFs, alongside weakened consumer demand for jewellery and a moderation in official sector purchases. The net 3% rise in total demand reflects how stronger investment flows can offset downturns in traditional physical consumption channels.

For market participants and observers, the Q2 results carry several implications. First, the resilience of ETF inflows suggests that in times of uncertainty or attractive relative pricing, investors will route capital into liquid assets tied to gold. Second, persistent high prices may continue to constrain consumer demand in price-sensitive markets, potentially delaying recovery in jewellery offtake until prices ease or incomes strengthen. Third, central banks’ decisions around reserve management and diversification remain an important source of demand, but quarter-to-quarter variations can materially affect overall market balance.

Looking ahead, gold demand trends will likely depend on the interplay between investment flows, retail jewellery buying patterns in key countries, and the strategic choices of official holders. Monitoring ETF inflows, price movements, and economic indicators in major consuming regions such as China and India will provide the clearest signals about whether the current mix of demand drivers will persist or shift in the coming quarters.

In summary, Q2 2025 saw global gold demand rise to 1,248.8 metric tons, supported primarily by a 78% surge in investment demand through ETFs, while jewellery consumption fell 14% to lows not seen since late 2020 and central-bank purchases eased by 21% to roughly 166.5 tons. These dynamics reflect a market where financial investment and physical consumption are moving in opposite directions, shaping both near-term price behavior and longer-term demand patterns.