Gold prices rose during Tuesday’s trading and reached a new record high. After surpassing the $3,600 per ounce barrier yesterday, US futures for the precious metal achieved another historic milestone today by breaking above the $3,700 per ounce level.
On the back of these gains, the yellow metal has extended a rally that has lifted its value by more than 90% since late 2022. Demand is expected to remain strong in the coming period, driven by a combination of factors outlined in the following report.
Will Central Banks Continue Buying?
Net annual central bank purchases have exceeded 1,000 metric tons per year since 2022, according to consultancy Metals Focus, which expects 900 tons of purchases this year — double the annual average of 457 tons during 2016–2021.
Emerging economies are seeking to diversify reserves away from the dollar, after Western sanctions froze about half of Russia’s official foreign exchange reserves in 2022.
Official figures reported to the International Monetary Fund account for only 34% of estimated central bank demand in 2024, according to the World Gold Council (WGC).
These purchases represented 23% of total annual gold demand between 2022–2025, double the share recorded in the 2010s.
Will Jewelry Demand Keep Falling?
Gold demand for jewelry — the primary source of physical demand — fell 14% to 341 tons in the second quarter of 2025, the lowest since the pandemic-hit third quarter of 2020, according to the WGC.
High prices were the main driver, particularly in China and India, where their combined share of the global market dropped below 50% for only the third time in five years.
Metals Focus estimated that gold jewelry fabrication fell 9% to 2,011 tons in 2024 and is expected to record a further 16% decline this year.
Are People Still Buying Bars and Coins?
A major shift has occurred in investor appetite for different retail products, but overall demand has remained strong.
Demand for gold bars rose 10% in 2024, while purchases of gold coins fell 31%, according to the WGC.
This trend has continued in 2025, with Metals Focus forecasting physical net investment to rise 2% this year to 1,218 tons, supported by higher demand in Asia amid positive price expectations.
Can Gold ETFs Attract More Inflows?
Exchange-traded funds (ETFs) have become a more important source of demand this year, recording inflows of 397 tons between January and June — the largest first-half inflows since 2020, according to the WGC.
Total ETF holdings reached 3,615.9 tons by the end of June, the highest since August 2022. The all-time high was 3,915 tons five years ago.
Metals Focus expects net investment in gold-backed ETFs to reach about 500 tons in 2025, after recording outflows of 7 tons in 2024.
