Global gold demand hits all-time high as economic uncertainty persists

Global gold demand reached record highs last year, with, for example, long queues seen outside bullion dealers in Australia, while in China demand for investment purposes outstripped buyers of gold jewellery for the first time.

Amid the gold price continuing to hit new record prices this year, The World Gold Council's Global Demand Trends report released Thursday showed that total gold demand had hit an all-time high of 5 002 tons last year.

"A record fourth quarter set the seal on a stellar year as continued geopolitical and economic uncertainty propelled hefty investment in gold, with an annual value of $555 billion," Louise Street, senior market analyst at the World Gold Council, said in an interview with BR.

"Not since the crises of the 1970s has gold performed as strongly as in 2025," said Schroders' Gold and Commodities Senior Portfolio Manager James Luke in another report, The LBMA (London Bullion Market Association) gold price set 53 new all-time highs in the year.

Street said global investment reached a landmark level of 2 175 tons. Investors seeking safe haven and diversification piled into gold ETF's, adding 801 tons throughout the year.

Investors also bought gold bars and coins reaching 1 374 tons or $154bn in value. The two markets China (28% growth year-on-year) and India (17%) made up more than 50% of the demand in this category.

Street said central bank gold demand remained elevated last year and would likely provide a strong underpin for gold demand to continue rising this year. Last year central banks, led by Poland's central bank, and a host of other emerging markets such as Kazakhstan, Brazil and India, led the demand for gold from these institutions.

Street said traditionally, gold producers were historically slow to bring new gold production online to take advantage of higher prices, and 2025 was no different, with global gold production increasing only by an average 1% to 3 672 tons.

Historically, it is not easy for gold miners to sharply increase production in the short term, and it is becoming more difficult to find, gain permits and build new mines.

The biggest increases in gold production last year were seen in Ghana (24%), Canada (15%), Australia (15%) and Chile (13%), said Street. An online search showed South Africa's gold production declined by 6% last year.

Street said gold jewellery demand softened as expected throughout the year given its high price, declining 18% compared to 2024. However, the total value of gold jewellery demand increased 18% year-on-year to $172bn.

Street said the increase in value of the jewellery demand highlighted the continued consumer willingness to buy at elevated prices. Jewellery demand volumes declined in all markets across the globe. In the two biggest markets, China and India, jewellery demand in tons fell by 25% and 24% respectively.

Street said economic and political uncertainties were, so far this year, showing little sign of retreat. Other factors that also continued to support the higher gold price were the weaker dollar, continuing demand from central banks and strong investment demand for investor diversification purposes.

She said the only negative factor that might lower the gold price this year was the outside chance that the US economy grew much faster than expected, which did not appear to be the case at present.

She said gold producers were focused on full price exposure with little appetite for hedging. While gold miners also had a stellar 2025, a median expectation for a price drop may, however, incite some increased caution.

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