Global demand for gold shows no sign of slowing down as investors and central banks continue to hoover up the safe haven asset.
The precious metal rallied over the first half of the year, recording a 26 per cent rise against the dollar and outperforming almost all other major asset classes, according to the latest report from the World Gold Council.
The report attributed an increase in demand for the asset to persisting market volatility, including “trade tensions, unpredictable US policy shifts and frequent geopolitical flashpoints”.
Louise Street, senior markets analyst at the World Gold Council, said: “The robust investment activity we have seen in the first half of 2025 underscores gold’s role as a hedge against economic and geopolitical risks.
“First half total investment was above 1,000t and the last time we saw a first half of that magnitude of investment was the first half of 2020. So it’s quite a striking total for the first half of the year.”
Central banks continued to add to reserves of the metal, but did so at a slower pace, adding 166t.
The council’s annual central bank survey showed 95 per cent of reserve managers believe global central bank gold reserves will increase over the next 12 months.
Total bar and coin investment rose 11 per cent year on year, producing the strongest first half since 2013, with the Chinese market in particular recording high demand.
Europe also recorded strong growth as gold investment doubled from the prior year. Investor interest remains fuelled by bullish price expectations and macroeconomic uncertainties, especially in eastern Europe.
There was also continued appetite for gold-backed exchange-traded funds (ETFs), with global holdings increasing by 397t over the first half of the year. The collective funds recorded their strongest semi-annual performance since the first of half of 2020, with Asian-listed funds a major contributor alongside the US.
However, Street acknowledged the possibility that “gold could trade within a relatively narrow range in the latter half of 2025” following its impressive start to the year.
Street added: “On the other hand, the macroeconomic environment remains highly unpredictable, which may underpin further gains for gold. Any material deterioration in global economic or geopolitical conditions could further amplify gold’s safe-haven appeal, potentially pushing prices higher still.”
Switzerland and the UK accounted for over 75 per cent of demand for European-listed funds in the second quarter, with the UK recording a 17 per cent increase in demand year on year.