World Gold Council (WGC) highlights how gold demand is shifting and what's driving it, especially in the second quarter of 2025. Here's a simpler explanation of the key takeaways:
Gold Demand is Up, But It's Changing
Why are People Buying More Gold?
The main reason is investment, and it's driven by a few factors:
- Uncertainty in the World: With lots of global trade tensions, unpredictable policies (especially from the US), and conflicts around the world, people are looking for safe places to put their money. Gold is traditionally seen as a "safe haven" during turbulent times.
- Gold's Good Performance: Gold prices have been going up significantly (26% in the first half of 2025!), which makes it attractive to investors looking for good returns. This creates a "momentum" where rising prices encourage more buying.
Where is the Investment Going?
- Gold ETFs (Exchange-Traded Funds) are Key: These are investment funds that hold physical gold, making it easy for people to invest without owning actual gold bars. They were the biggest driver of demand, with significant money flowing into them, especially from Asia and the US.
- Bars and Coins are Still Popular: Traditional investments in physical gold bars and coins also grew by 11%. Chinese investors, in particular, bought a lot more, and Indian investors continued to add to their gold holdings.
What About Central Banks?
- Still Buying, But Slower: Central banks (like a country's main bank) are still adding gold to their reserves, but at a slightly slower pace than before. This is because they also see gold as a stable asset during economic and political uncertainties.
What's Happening with Jewelry?
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Jewelry Demand is Down (in volume): Despite the overall increase in gold demand, people bought less gold for jewelry. This is likely because gold prices are so high, making jewelry more expensive. However, even with less volume, the value of jewelry sales still went up due to the higher prices.
The Outlook for Gold:
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Continued Volatility: Experts believe the market will remain unpredictable.
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Gold's Safe-Haven Appeal: If global economic or political problems worsen, gold's appeal as a safe investment will likely grow, potentially pushing prices even higher.
In short, gold is a popular investment right now because the world feels uncertain and gold's price has been doing well. While traditional jewelry buying has slowed down due to high prices, investors are pouring money into gold, making it a strong asset in a volatile global landscape.
