From the demand side, both institutions and individual investors are actively allocating gold to hedge macroeconomic and geopolitical risks, which also provides a solid demand basis for gold prices.
The second quarter report of 2025 released by the World Gold Council (WGC) shows that in the high gold price environment, the total global gold demand (including over-the-counter trading) in the second quarter reached 1,249 tons, a year-on-year increase of 3%. Strong investment demand has become the main driving force for demand growth. Among them, the net inflow of global gold ETFs in the second quarter was 170 tons. Supported by the record inflows in the first quarter, the total global gold ETF demand in the first half of the year reached 397 tons, the highest first half record since 2020; the total global gold bar and gold coin investment demand in the second quarter was 307 tons, an increase of 11% year-on-year.
The report also shows that in the second quarter of this year, the global central bank’s gold purchase trend continued but the pace slowed down, with a total increase of 166 tons in the second quarter. Despite the slowdown in the growth rate of gold purchases, the global central bank’s gold purchase volume is still at a significant high under the conditions of continued global economic and geopolitical uncertainty. The “2025 Global Central Bank Gold Reserve Survey” released by the World Gold Council on June 17 showed that 95% of the central banks surveyed expect global central bank gold reserves to increase further in the next 12 months.
Louise Street, senior market analyst at the World Gold Association, said that the global gold market experienced a turbulent start in 2025, with intensifying trade frictions, capricious US policies, and endless geopolitical hotspots. The US dollar gold price rose by as much as 26% in the first half of the year, outperforming most mainstream asset classes. Such a strong start means that gold prices may fluctuate in a relatively narrow range in the second half of this year. On the other hand, the outlook for the macroeconomic environment is still highly unclear, which may provide further support for gold. If there is any substantial deterioration in the global economic or geopolitical situation, the attractiveness of gold as a safe-haven asset may be further amplified, pushing gold prices to rise again.
