Gold demand in Q2 2025 rose to 1,249 tonnes, up 3% year-on-year, with total value surging 45% to a record $132 billion, according to the latest report by the World Gold Council (WGC). The jump was largely fueled by strong investment flows into gold-backed ETFs and continued interest in physical gold by bar and coin investors.

This marked the second straight quarter of elevated investment activity amid global macro uncertainty, with investors seeking safe-haven assets amid rising geopolitical risks and volatile trade dynamics. According to WGC, bar and coin investment witnessed its strongest first-half performance since 2013.

Central banks also remained active buyers, adding 166 tonnes to global gold reserves. Although the pace of official sector purchases moderated compared to previous quarters, the WGC noted that the overall outlook for central bank demand remains strong.

In contrast, gold jewellery demand declined 14% year-on-year in volume terms to 341 tonnes, with volumes retreating to near-pandemic levels. However, high prices meant that overall spending on gold jewellery increased, continuing a recent trend where value and volume have diverged. The average LBMA gold price hit a record $3,280/oz during the quarter, up 40% from a year ago.

Technology-related gold demand dipped marginally, with electronics usage down 2%. However, demand linked to AI-related applications remains a bright spot in an otherwise muted industrial segment.

On the supply side, total gold supply rose 3% to 1,249 tonnes. Mine production hit a record 909 tonnes in Q2, while recycling activity remained subdued despite record-high prices, partly due to Indian consumers opting to exchange or pledge old jewellery rather than sell it outright.

OTC investment and stock changes contributed an additional 170 tonnes to demand, with anecdotal evidence pointing to robust participation from global high-net-worth individuals.

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