Investor Flows Fuelled Gold Demand In Q2 Demand
FinTech BizNews Service
Mumbai, July 31, 2025: Total Q2 gold demand (inclusive of OTC investment) increased by 3% y/y to 1,249t. In value terms, total gold demand jumped 45% y/y to US$132bn. Investor flows were again the engine of growth, driven by safe haven motives and the record gold price. Central bank buying continued but at a slightly lower pace than in recent years. A sharp decline in the volume of jewellery demand contrasted with a jump in value, both thanks to the high gold price.
Key Highlights
Gold-backed ETF inflows continued apace in Q2. A combination of ongoing uncertainty over global trade policy, geopolitical flare-ups and gold price strength fuelled global demand for gold ETFs.
Gold bar and coin demand saw healthy y/y growth. Safe-haven motives and record gold prices attracted investors to gold, generating the strongest H1 for bar and coin demand since 2013.
Central bank demand was at the lower end of recent buying ranges. Central banks added 166t of gold to official reserves in Q2, lower than recent average levels but indicative of still-healthy demand.
Record prices continued to impact affordability of gold jewellery. Most markets witnessed a sharp y/y decline in Q2 jewellery demand volumes. This contrasted with a sharp rise in demand values.
Total gold supply increased 3%, with modest growth in both mine production and recycling. Nevertheless, recycling volumes remain less reactive to record gold prices than might have been expected.
2025 Outlook
Investment demand – for gold ETFs, bars and coins – is expected to continue at elevated levels, albeit potentially at a slower rate in H2. Central bank buying has slowed but remains healthy and the longer-term trend of adding to holdings remains intact. The high gold price environment continues to stymie gold jewellery volumes, although the flip side is that recycling remains constrained.
