Gold prices surged 26% in the first half of 2025, outperforming various assets, driven by investors seeking refuge from economic and geopolitical uncertainties.
ETF investors played a significant role in boosting global gold investment demand by 78% year-on-year in Q2, contributing to the strongest performance since the record-breaking H1 of 2020. This surge came despite gold prices cooling from their peak during the quarter.
According to the World Gold Council’s Gold Demand Trends Report for Q2, investors, including those in Australia, have been pivotal in driving gold demand amidst structural shifts and geopolitical unrest, with expectations of lower interest rates further bolstering the market.
The report also highlighted a new trend where selected Chinese insurers received regulatory approval to invest in gold, expanding the investor base at a crucial juncture.
In Q2 2025, total quarterly gold demand, including Over the Counter transactions, increased by 3% year-on-year, with gold ETFs remaining a key component of investment demand. Global gold ETF demand in the first half of 2025 reached its highest level since 2020, indicating a strong appetite for gold investments.
Australia saw continued inflows into gold ETFs in Q2, with total assets under management reaching US$5 billion. The rise in gold ETF demand in Australia mirrors the global trend, as investors worldwide turn to gold as a hedge against economic and geopolitical risks.
Central banks also continued their gold buying spree in Q2, albeit at a slower pace, adding 166t to their reserves. The World Gold Council’s survey revealed that central banks see gold as a diversifier and hedge during crises and inflation, with expectations of increased gold reserves in the coming year.
In the bar and coin segment, Chinese investors led the way with a 11% year-on-year increase in investment, while Indian investors also added to their holdings. However, jewellery demand saw a decline, particularly in China and India, reflecting changing consumer preferences.
Market volatility has further fueled investor interest in gold as a safe-haven asset, with gold appreciating by 26% in the first half of 2025. The uncertain macroeconomic environment and geopolitical tensions have added to gold’s appeal, with potential for further price gains if global conditions deteriorate.
Looking ahead, while gold’s strong performance in the first half of 2025 suggests a possible period of consolidation in the latter half, ongoing economic and geopolitical uncertainties could drive prices higher, reinforcing gold’s status as a reliable investment option for risk-averse investors.
Shaokai Fan, the Head of Asia-Pacific and Global Head of Central Banks at the World Gold Council, emphasized gold’s strategic importance as an asset class, highlighting its role as a hedge against global risks and its attractiveness to investors amid evolving market dynamics.
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