Q1 gold demand soars to highest since 2016: WGC

Gold bar. (Image by Bullion Vault, )

First-quarter gold demand hit its highest level in nine years as exchange-traded funds loaded up on the metal, according to the World Gold Council (WGC).

Total gold demand reached 1,206 tonnes in the first three months of 2025, a 1% increase from the same period a year ago, the WGC said in a new report Wednesday. Soaring inflows into gold ETFs fuelled a 170% surge in investment demand to 552 tonnes, the highest since the first quarter of 2022, WGC said.

As gold prices set multiple record highs this year, including touching $3,500.05 per oz. last week, investors have piled into physical gold ETFs, which grew by $21 billion in the first quarter, their second highest quarterly level since the second quarter of 2020.

Gold’s average price reached $2,860 per oz. in the quarter, a 38% jump from a year ago, according to data compiled by the London Bullion Market Association.

Flows into gold

Investment flows into physical gold will probably continue to gather pace this year, the WGC said. Key factors supporting demand include continued geopolitical tensions, near-term stagflation risks, medium-term recession risks, elevated correlations between stocks and bonds and an expected increase in US deficits.

Central banks bought 244 tonnes of gold in the first quarter, 21% less than in the same period a year ago but within the quarterly range of the last three years. Persistent trade tensions will probably drive full-year central bank purchases close to the range of the past three years, according to the WGC.

First-quarter bar and coin demand rose 2.6% to 325 tonnes, which is 15% above the five-year quarterly average. China accounted for much of the increase, posting its second-highest quarter of retail investment.

Tech demand

Technology demand was little changed at 80.5 tonnes. Ongoing artificial intelligence adoption drove continued growth in the electronics sector, but uncertainty over tariffs should result in a challenging environment for the rest of the year, the WGC said.

Jewelry consumption shrank 21% from the year-ago quarter to 380 tonnes, weighed down by elevated prices. Consumption in the period hit its lowest level since the Covid-19 pandemic brought global economies to a standstill in 2020, and WGC economists predict full-year jewelry demand will be weaker than expected in 2025 on lower growth and higher prices.

Total gold supply grew 1% from a year earlier to 1,206 tonnes, with mine production hitting a first-quarter record of 856 tonnes. Recycling declined 1% as consumers kept their gold hoping for higher prices.

Mine supply this year will probably stay close to its 2024 record level, the WGC said. “Unprecedented” cash generation should allow announced development plans to advance and mine production to stay strong. While Ghana, Chile and Canada have healthy production pipelines, disruptions in Turkey and Russia and cutbacks in Australia are expected to weigh on total output.