Who’s Buying Gold in 2025?

According to the latest data from the World Gold Council, global demand for gold rose by 1% in the first quarter of 2025 compared to the same period last year. Meanwhile, the price of gold has surged by an impressive 38% compared to the first quarter of 2024.

Let’s take a closer look at where this demand is coming from, and how it has driven up the price of the precious metal between January and March 2025. But first, an interesting insight into global gold supply.

High Prices, Low Sales: A Complex Supply Landscape

There are three primary sources of global gold supply: mined production, recycled gold, and net producer hedging (gold held back by miners in anticipation of price changes or demand shocks).

In Q1 2025, global mine production reached 856 tonnes – the highest first-quarter output ever recorded. China, Australia, and Canada remain the leading producers. Chinese production rose by 2% year-on-year, while Canada saw a 4% increase. Australia, however, experienced a slight decline of 3%.

Notably, Chile’s output jumped by 45% and Ghana’s by 11%, largely due to stabilised mining operations and expansion of existing projects.

Recycled gold – mostly originating from jewellery – typically increases in volume when prices rise, as individuals sell to take advantage of high values. Yet, surprisingly, recycled supply dropped by 1% over the past year. The World Gold Council attributes this to a trend of people exchanging old jewellery for new items or using their gold as collateral through pawnbroking, rather than selling outright.

Investment Gold Gains Momentum

The most significant shift in demand this year has come from investors. While jewellery and collectible coins have seen a decline, demand has surged for investment-grade gold products – particularly high-purity bars, standardised coins, and gold-backed ETFs (exchange-traded funds).

In Q1 2025, global demand for investment gold soared to 551.9 tonnes – a 170% increase compared to Q1 2024. This figure approaches record levels seen during previous periods of crisis: Q1 2020 (554.5 tonnes) and Q1 2022 (555.9 tonnes), which were shaped by the COVID-19 pandemic and the outbreak of war in Ukraine.

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In contrast, over-the-counter (OTC) demand for gold turned negative, with net sales of 104 tonnes – a stark reversal from the 61.2 tonnes of net purchases a year earlier. This shift may reflect investors moving their preference from private OTC trades to more transparent and accessible ETF holdings.

ETF Inflows at Multi-Year Highs

Gold-backed ETFs saw inflows of 226.5 tonnes in Q1 2025 – the ninth highest quarterly figure since 2010. When comparing only first quarters, 2025 ranks fourth, behind 2016, 2020, and 2022 – all years marked by heightened global uncertainty.

The geographic origin of these ETF inflows is particularly telling

North America led the way, contributing 210 tonnes, followed by Asia with a record 103 tonnes – a surprising move, as Asian investors traditionally favour physical gold over paper assets.

This shift in investor behaviour is also reflected in the jewellery sector. Global jewellery demand dropped by 21%, reaching its lowest level since Q3 2020. High prices have discouraged purchases, and many investors now prefer smaller, purer forms of gold such as bars and coins over ornamental jewellery.

Central Banks Still Buying

Although central bank demand has decreased by 21% compared to Q1 2024, purchases remain robust. In the first three months of 2025, central banks and state institutions acquired a net total of 243.7 tonnes of gold.

The National Bank of Poland was the largest buyer, acquiring 49 tonnes in Q1 alone – more than half of the 90 tonnes it purchased across the whole of 2024. Other notable purchases came from the People’s Bank of China (+13 tonnes), the National Bank of Kazakhstan (+6 tonnes), and the Czech National Bank (+5 tonnes).

Additionally, Azerbaijan’s sovereign wealth fund (SOFAZ) bought 19 tonnes of gold, boosting its reserves to 165 tonnes – now making up 26% of the fund’s total assets.

Conclusion: A Market in Transition

The changing dynamics of the gold market highlight how investors are responding to ongoing economic and geopolitical uncertainty – including trade tensions between the US and China. The strong shift toward investment gold reflects a growing desire to preserve wealth and hedge against instability.

However, it’s important to note that some of this demand may be driven more by momentum than fundamentals. With gold prices having risen by more than 90% since 2020, fear of missing out could be pushing some investors to jump in late.

As always, a cautious and informed approach to investment is essential – especially when markets are driven by sentiment as much as strategy.