Global gold demand reaches record high as investors flock to safe-haven asset

Global gold demand surged to its highest level on record in the third quarter of 2025, fuelled by a powerful mix of investor fear, geopolitical tensions, and a weakening US dollar, according to the World Gold Council’s (WGC) Q3 2025 Gold Demand Trends report.

According to the WGC on Thursday, total demand, including over-the-counter (OTC) trading, climbed 3% year-on-year to 1 313 tons, worth an unprecedented $146 billion, marking the strongest quarter ever recorded.

Year-to-date, gold demand rose to 3 717 tons, up 1% from 2024, with the value soaring 41% to $384bn.

Investment was the key driver, accounting for 55% of total demand. Investors added 537 tons in the third quarter – a 47% increase year-on-year – with both gold-backed exchange-traded funds (ETFs) and physical investment surging amid growing “FOMO” (fear of missing out) as prices approached $4 000 per ounce.

Gold ETFs recorded 222 tons of inflows in the third quarter, the strongest since 2020, worth around $26bn. That brought total ETF holdings to 3 838 tons, just shy of the all-time high seen five years ago. Year-to-date inflows reached 619 tons ($64bn), led by North American funds with 346 tons, followed by Europe (148 tons) and Asia (118 tons).

Bar and coin investment also strengthened, climbing 17% year-on-year to 316 tons, with significant contributions from India (92 tons) and China (74 tons).

In contrast, jewellery demand continued to suffer under record prices. Consumption fell 19% year-on-year to 371 tons, the weakest third quarter since 2020, though the total value rose 13% to $41bn.

Despite this, central banks remained active buyers, adding 220 tons to their reserves – up 28% from the second quarter, and 10% higher year-on-year – reflecting continued diversification away from traditional currencies. Cumulative central bank purchases reached 634 tons in the first nine months of the year.

Gold supply matched the record demand at 1 313 tons, rising 3% year-on-year. Mine production increased 2% to 977 tons, supported by new projects in Ghana, Canada and Australia, while recycling rose 6% to 344 tons, restrained by expectations of further price gains.

This comes as gold prices rose toward $3 990 per ounce on Thursday, halting a four-day decline, supported by strong central bank buying.

Louise Street, senior markets analyst at the World Gold Council, said the surge in the third quarter reflects investors’ search for safety and resilience in uncertain times.

“Gold’s climb towards $4 000 per ounce in the third quarter underscores the strength and persistence of the factors that have been driving demand throughout the year,” Street said.

“Heightened geopolitical tensions, stubborn inflationary pressures and uncertainty around global trade policy have all fuelled appetite for safe-haven assets as investors look to build resilience in their portfolios.”

Street added that the outlook for gold remains optimistic as continued US dollar weakness, lower interest rate expectations, and the threat of stagflation could sustain strong investment flows.

“Gold has set record after record this year, and the current environment suggests there could be more upside gains for gold,” she said. “Our research indicates the market is not yet saturated, and the strategic case to hold gold remains firmly in place.”

The report noted that the London Bullion Market Association gold price hit 13 new all-time highs during the quarter, averaging $3 456.54 per ounce — up 40% year-on-year and 5% quarter-on-quarter — driven by demand from investors and central banks alike.

As markets remain volatile, the World Gold Council expects investment demand to stay robust through the remainder of 2025, with prices likely to remain elevated into 2026.

James Luke, fund manager for metals at Schroders, said a key attraction of gold miners coming into this bull market has been their record cashflow margins. 

"Consensus gold price forecasts remain $300 per ounce below spot prices in 2026 and $1 000 per ounce lower in 2027, so room for upward earnings revisions remains large," Luke said.

"Producers’ production profiles are generally skewed to the back half of 2025, with many expecting the strongest quarter of production in the fourth quarter. We expect to see record free cash flow and upsized returns programmes." 

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