WGC Report Identifies Key Drivers Behind Record Q3 Gold Demand

Mon Nov 10 2025

The World Gold Council’s (WGC) “Gold Demand Trends Q3 2025” report, released on October 30, reveals that against a backdrop of slowing economic growth and geopolitical uncertainty, strong investor demand for safe-haven assets drove a historic quarterly performance for gold investment. Data up to November 7 indicates this trend continues, with gold’s role as a stagflation hedge becoming increasingly prominent.

Investment Demand Strengthens, Led by ETFs

Report shows that global gold investment demand reached 537.2 metric tons in the third quarter of 2025, up 13% from the second quarter and surging 47% year-on-year. This growth was primarily driven by the strong performance of gold exchange-traded funds (ETFs), which saw inflows of 222 metric tons for the quarter – a 30% increase from Q2 and a staggering 134% over the same period of last year, marking the strongest third quarter since 2020.

Joe Cavatoni, Senior Market Strategist, Americas at the World Gold Council, noted, “Western investors are increasingly recognizing the pervasive risks and uncertainties in the equity markets, which is a key factor driving the rapid growth in gold ETF demand.” Regionally, North America led with inflows of 346 metric tons, followed by Europe and Asia with 148 metric tons and 118 metric tons, respectively.

Strong Bar and Coin Demand, Indian Market Stands Out

Despite a significant price increase in September, retail investor demand for gold bars and coins remained robust. Demand in this segment reached 315.5 metric tons in the third quarter, marking the fourth consecutive quarter above 300 metric tons. The Indian market was particularly notable, with bar and coin purchases reaching 91.6 metric tons, a record value exceeding $10 billion, surpassing China’s 73.7 metric tons for the first time.

Cavatoni stated, “Investors are not intimidated by these prices; they see the value of gold for portfolio risk management and asset diversification.” Notably, a unique phenomenon emerged in Asian markets where jewellery consumers switched to lower-premium pure investment products, reflecting a shift in the traditional consumption habit of viewing gold jewellery as a form of savings and wealth preservation in the region.

Central Bank Purchases Remain Steady, Emerging Markets Dominate

Although the pace of buying slowed compared to the same period in 2024, central banks still added a net 220 metric tons of gold in the third quarter, up 28% quarter-on-quarter. Total purchases for the first three quarters reached 633 metric tons, with the central banks of Poland, China, Turkey, Kazakhstan, and India continuing to be the main buyers.

Particularly noteworthy, the Central Bank of Brazil returned to the market after a four-year hiatus, purchasing 15 metric tons of gold. Cavatoni analyzed, “Trade tensions, geopolitical conflicts, and concerns about US sanction policies are all driving central banks to continue strategic gold accumulation. Our annual survey shows that central banks expect reliance on the US dollar and euro to decrease over the next five years.”

Gold Outlook: Multiple Factors Support Continued Investment Demand

The World Gold Council has raised its 2025 gold investment demand forecast and expects central bank purchases to be between 750 and 900 metric tons. Multiple factors in the current market environment support gold’s investment appeal: the Federal Reserve’s interest rate cuts reduce the opportunity cost of holding gold; stagflation concerns drive investors to seek value preservation tools; and geopolitical risks boost safe-haven demand.

With the arrival of the traditional gold consumption season in the fourth quarter and the continuation of the Trump administration’s exemption for gold bars from tariffs, analysts expect gold investment demand, particularly for bar and coin purchases in the US market, to show further recovery. Gold, as a unique asset combining monetary attributes and safe-haven functions, is ushering in a new phase of structural growth in investment demand.

Source: https://nai500.com/