9-year peak in gold demand: Record prices could not stop the investor

📌 What Happened?

According to the “Gold Demand Trends” report published by the World Gold Council, global gold demand in the first quarter of 2025 increased by 1% compared to the same period last year, reaching 1206 tons. This data represents the highest level seen in the first quarters since 2016. In particular, investors turning to gold exchange mutual funds (ETFs) was instrumental in this increase.

According to the report, the purchase of gold for investment purposes increased to 551.9 tons, a significant increase from the level of 344.7 tons in the previous quarter. Purchases of coins and gold bullion also reached 325.4 tons. However, due to record price levels, there has been a sharp decline in the demand for gold for jewelry purposes, and this segment has fallen to its lowest level since the 2020 pandemic period.

Central banks, on the other hand, put a brake on their purchase of gold. During this period, 243.7 tons of gold were purchased, in the previous quarter this figure was at the level of 337.7 tons. The average gold price rose 38% year-on-year in the first quarter to $2,860.

New US trade tariffs, increased geopolitical uncertainties, volatility in the stock markets and the weakening dollar stood out as the main factors in the increased interest in gold. The search for safe havens has led investors again to physical and financial gold assets.

🧠 Expert Review

The first quarter data on the gold market makes it clear that investors continue to seek safe haven during periods of uncertainty. Despite record prices, the increase in ETF and bullion demand indicates that positioning for long-term hedging rather than short-term profit realizations is at the forefront. Although the slowing of the pace of central banks is seen as temporary, these purchases will continue at a strategic level as systematic risks persist. The decrease in the demand for jewelry reflects the higher price sensitivity in the consumer segment.

✅ Take Action

The upward trend in gold prices and the increase in investment demand are bringing gold back to the forefront in terms of diversification in portfolios.
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🛑 Disclaimer

This content is created by Investment Desk AI and is not Investment Advice. You should make your decisions based on your own research and professional advisors.

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