Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
2025 marked a groundbreaking year for the global gold market, with demand volumes and prices shattering historical records, according to the World Gold Council (WGC) annual report.
The WGC said total global gold demand, including over-the-counter (OTC) transactions, exceeded 5,000 tonnes for the first time, underscoring gold’s renewed role as a safe-haven asset amid heightened geopolitical and economic uncertainty.
The surge in demand, combined with a sharp rise in prices, pushed the total value of gold demand to an unprecedented $555 billion, representing a 45% year-on-year increase.
Gold prices set 53 new all-time highs during 2025, with the LBMA PM gold price averaging $3,431 per ounce for the year, up 44% year-on-year, while the average price in the fourth quarter climbed to a record $4,135 per ounce.
The WGC said heightened investment activity was the principal driver of demand growth, as investors sought protection against geopolitical risks, market volatility and expectations of lower interest rates. Global gold exchange-traded fund (ETF) holdings expanded by 801 tonnes, marking the second-strongest year on record, while bar and coin demand accelerated to a 12-year high.
“Safe-haven and diversification motives were consistent themes driving investment interest throughout the year,” the WGC said.
Central bank buying remained historically elevated, with net purchases reaching 863 tonnes in 2025, placing demand at the upper end of the WGC’s expectations, although slightly below the record levels seen in the preceding three years.
In contrast, jewellery demand declined sharply in volume terms, reflecting affordability pressures from persistently high prices. Global jewellery consumption fell to 1,542 tonnes, an 18% decline year-on-year. However, the value of jewellery demand rose 18% to a record $172 billion, indicating sustained consumer appetite despite lower volumes.
Technology demand remained broadly stable at 323 tonnes, supported by continued growth in artificial intelligence-related applications, even as the consumer electronics sector faced disruption.
In the UAE, gold demand followed the global trend of diverging consumption and investment patterns. Jewellery demand in the country fell to 29.4 tonnes in 2025, down 15% from 34.7 tonnes in 2024, as higher prices weighed on retail purchases.
At the same time, gold bar and coin demand increased to 14.8 tonnes, up 9% year-on-year, reflecting growing interest in gold as an investment and wealth-preservation asset amid regional and global uncertainty.
On the supply side, total gold supply rose marginally by 1% to 5,002 tonnes, with mine production inching up to a new record of 3,672 tonnes, while recycling increased 3% to 1,404 tonnes, a relatively muted response given the sharp rise in prices.
Looking ahead to 2026, the WGC expects geopolitical tensions to remain a key driver of gold demand. The council forecasts another year of strong ETF inflows, robust bar and coin demand, and sustained central bank buying, while jewellery demand is likely to remain weak in a persistently high-price environment. Supply growth is expected to remain constrained, with both mine output and recycling projected to stay close to 2025 levels.
“Bond market uncertainty expected policy rate cuts and pressure on the US dollar are likely key factors supporting continued strength across gold investment sectors,” the report said.
The WGC said the combination of elevated geopolitical risk, shifting monetary policy expectations and gold’s continued appeal as a portfolio diversifier is likely to keep demand resilient in the year ahead, reinforcing gold’s position as a strategic asset in global markets.
