Recently World Gold Council released the Gold Demand Trends, Q2 2025 report. The report says, Investment drives gold demand in Q2. Demand value rockets to a record US$132bn. 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.
A second consecutive quarter of hefty demand for global gold-backed ETFs was instrumental in boosting overall Q2 demand. Uncertain global trade policy, geopolitical turbulence and the rising gold price all fuelled inflows.
Bar and coin investors also joined the fray, attracted by the rising price and gold’s safe-haven attributes. Two consecutive quarters generated the strongest first half for bar and coin investment since 2013.
Central banks remained a key pillar of global demand, adding 166t to global official gold reserves. Although the pace of buying moderated, the outlook for central bank demand remains healthy. Jewellery demand volumes and value continued to diverge: y/y declines in tonnage were widespread, while spending on gold jewellery saw universal gains. Volumes were very muted, almost retreating back to 2020 pandemic levels.
Gold used in technology came under pressure from the potential impact of US tariffs, although growing demand for AI-related applications remains an area of strength.
By presenting the outlook for H2, 2025, the report said, “Our demand and supply expectations for FY2025 reflect the dynamics discussed in our mid-year outlook.”
1: Global gold ETFs have further upside potential in our view, but might face some near-term headwinds before resuming growth in H2.
2: Retail investment has been solid and we see only modest softening in H2.
3: Price has factored heavily in weak jewellery tonnage demand. However, the central case of only modest price gains in H2 are unlikely to produce much of a recovery, given that economic drivers are lacklustre in most regions.
4: The technology story is set to continue with the sector challenged by high prices, slower economic growth and tariffs but offset by fervent AI-related spending.
5: Central bank demand has been revised down modestly to reflect the slowdown in Q2. But our view is that demand continues apace as prices present less of a hindrance in the second half.
6: Producers margins increased in H1 and will likely stay high, incentivising a continuation of ramp ups and new mine supply to take production to yet another record level in 2025.
7: Recycling is expected to rise but less than implied by gold’s price performance having been heavily influenced by monetisation of old jewellery.
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