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Global gold demand struck levels not seen for almost a decade in the first quarter as macroeconomic jitters drove safe-haven buying, according to the World Gold Council (WGC).
Between January and March, yellow metal demand (including over-the-counter (OTC) dealing) rose 1% to 1,206 tonnes. This was the highest level since the first quarter of 2016.
The WGC said that “the specter of US tariffs, geopolitical uncertainty, stock market volatility and US dollar weakness” all fueled gold demand last quarter.
It noted that the London Bullion Market Association (LBMA) PM gold fix averaged $2,860 per ounce – up 38% year on year – as bullion marched to repeated record highs.
Gold’s strengthened further in the current quarter and hit fresh peaks of $3,500.05 on 22 April. It has since retraced and was last changing hands at $3,286.59, up 25% since 1 January.
The council said that 2025’s price gains have been “sparked by US tariffs and cemented by concerns over erratic and unpredictable US policy announcements, fears of stagflation and/or recession, continued geopolitical jitters and the consequent turmoil in equity markets of such an uncertain environment.”
ETFs Steal The Show
Historical gold demand
Gold’s first-quarter demand boom was largely thanks to robust inflows across exchange-traded funds (ETFs), the WGC noted.
It said that “a sharp revival in gold ETF inflows fueled a more-than-doubling of total
investment demand to 552 tonnes.”
This was up a whopping 170% year on year, and represented levels not seen since the start of 2022 when Russia invaded Ukraine.
Total ETF holdings rose by 226 tonnes during quarter one to take total holdings to 3,445 tonnes, the highest level since May 2023. Boosted by the gold price boom, total assets under management (AUMs) reached an all-time summit of $345bn by the end of the quarter.
The WGC said that “the first few weeks of quarter two have seen an acceleration in demand for global gold ETFs, most notably in Asia, where flows have already surpassed their quarter one total.”
It added that “should demand continue at the current pace throughout April, we could see the strongest three-month consecutive run of inflows since the outbreak of Covid drove investors to gold in 2020.”
Collective holdings in gold-backed ETFs reached an all-time peak of 3,929 tonnes in November 2020, around 10% higher than current levels.
Mixed Bag Elsewhere
Meanwhile, gold bar and coin demand totaled 325 tonnes during the first quarter, up 3% year on year. The WGC said that “China drove much of this increase, posting its second-highest quarter of retail investment.”
Global bar and coin demand was also 15% above the five-year average.
However, the WGC said that “gold jewelry demand fell sharply in the record price environment,” with first-quarter volumes plunging to their lowest since the pandemic sapped demand in 2020.
Cumulative jewelry demand dropped 19% year on year to 434 tonnes.
Central banks bought 244 tonnes of the precious metal in quarter one, down 21% from the same month in 2024.
Institutions paused for breath after hoovering up 333 tonnes of gold in the fourth quarter. Total purchases last year exceeded 1,000 tonnes for the third successive year.
Total gold supply edged 1% higher in the first three months of 2025, to 1,206 tonnes. Mine production rose fractionally to 856 tonnes, while recycled gold levels fell modestly to 345 tonnes.
