2025 was HUGE for gold

Gold Demand Trends: Q4 & Full Year 2025 – A Detailed Summary

Key Concepts:

• Gold Demand: Overall global appetite for gold across various sectors.
• ETFs (Exchange Traded Funds): Investment funds tracking the price of gold, allowing investors to gain exposure without physically owning the metal.
• Bar and Coin: Physical gold investment in the form of bars and coins.
• Central Bank Demand: Gold purchases made by central banks for reserve diversification and safe haven purposes.
• Geopolitical Risk: Risks stemming from political instability and international conflicts.
• Mine Production: The amount of gold extracted from mining operations.
• Recycling: The process of recovering gold from existing products (jewelry, electronics, etc.).
• Gold Hub: The website (goldhub.com) where the full report and data are available.

1. Record-Breaking Performance in 2025

2025 was a landmark year for gold, witnessing 53 new all-time highs in the gold price. The average gold price in Q4 2025 was 55% higher than the average for Q4 2024. This price surge was directly correlated with increased demand, resulting in overall demand exceeding previous record highs. The year was characterized as “groundbreaking” with significant increases across multiple sectors.

2. Investment Demand – The Primary Driver

Global gold demand surpassed 5,000 tons for the first time ever in 2025, primarily fueled by a surge in investment demand. This was broken down into two key components:

• Gold-backed ETFs: Experienced the second-highest year ever in terms of tonnage increase. Over half of this increase came from North American listed funds. Notably, Asian listed funds (China, India, and Japan) saw substantial inflows and a broadening of the investor base, with significant headroom for further growth.
• Bar and Coin: Demand reached a 12-year high, driven by safe-haven sentiment and price momentum. However, there was also two-way activity, with some investors utilizing the price increase as a selling opportunity, particularly in the US and Japan (where older generations with legacy holdings were selling while younger generations were buying).

3. Underlying Factors Driving Investment Demand

Several factors contributed to the heightened investment demand:

• Geopolitical Risk & Instability: Continued high levels of global geopolitical risk and instability.
• Dollar Weakness: A relatively weak US dollar.
• Stock Market Performance: Rising stock markets highlighted the value of diversifiers like gold.
• Price Momentum: The consistently rising gold price itself acted as a catalyst for further investment.

4. Central Bank Activity – Sustained Strength

Central banks continued their trend of gold accumulation, purchasing 863 tons in 2025. While slightly lower than the 1,000+ tons purchased in the previous three years, this figure remained well above historical norms. The primary motivations for central bank purchases included:

• Diversification: Reducing reliance on specific currencies.
• Crisis Protection: Gold’s role as a safe haven asset during times of economic uncertainty.
• Lack of Default Risk: Gold’s inherent value and absence of counterparty risk.

5. Jewelry Demand – Volume Decline, Value Increase

While jewelry demand experienced a decline in volume (down to a 5-year low), the value of gold jewelry actually increased by 18% year-on-year. This indicates that consumers were allocating a larger share of their budget to gold jewelry, albeit purchasing smaller or lighter weight pieces. In some markets like India and China, a portion of jewelry demand shifted towards lower-premium bar and coin investment products.

6. Technology Demand – Balancing Forces

Demand for gold in the technology sector remained relatively stable compared to 2024. The growth in the AI sector, requiring gold for components and infrastructure, was offset by challenges in the traditional consumer electronics sector, including supply chain disruptions and tariff uncertainty.

7. Supply Side Dynamics – A Slight Increase

Total gold supply increased slightly, exceeding 5,000 tons for the first time in the 55-year data series. This increase was driven by modest gains in both mine production and recycling. However, recycling activity did not respond as strongly as expected to the rising gold price. This was attributed to:

• Limited Economic Distress: A lack of widespread economic hardship forcing consumers to sell their gold.
• Price Expectations: Some consumers anticipating even higher prices and delaying sales.
• Collateralization in India: Increased use of gold jewelry as collateral for loans in India, reducing the amount available for recycling.

8. Outlook for 2026

The outlook for 2026 anticipates continued strength in gold demand, driven by:

• Geopolitical Factors: Ongoing geopolitical instability.
• Safe Haven & Diversification: Continued demand for gold as a safe haven asset and portfolio diversifier.
• Central Bank Activity: Sustained interest from central banks.
• Jewelry Demand: Likely continued softness in the jewelry sector.

9. Notable Quote

“We’re not seeing that that demand is running out of steam in any way. There’s still a lot of headroom for gold ETFs to to grow further.” – Luis Street, regarding the potential for continued growth in gold-backed ETFs.

10. Synthesis & Conclusion

2025 was a record-breaking year for gold, driven primarily by surging investment demand fueled by geopolitical uncertainty, economic factors, and price momentum. While jewelry demand saw a volume decline, its value increased, demonstrating continued consumer appetite. Central bank activity remained robust, and the supply side experienced a slight increase. The outlook for 2026 remains positive, with continued demand expected, although balanced by potential softness in the jewelry sector. The full report, available at goldhub.com, provides a more detailed analysis of these trends and supporting data.