Global gold demand grows despite decline in jewelry consumption
31 July 12:30
Global demand for gold in the second quarter of 2025 increased by 3% compared to the same period last year, reaching 1,248.8 tons, including over-the-counter transactions. This is evidenced by the data of the World Gold Council, "Komersant Ukrainian" reports with reference to Reuters.
Investment boom amid global instability
The most impressive was the 78% increase in investment in the precious metal. This happened against the backdrop of a rapid increase in gold prices, which have risen by 26% since the beginning of 2025 and reached a historic high of $3,500 per troy ounce in April.
Experts attribute the increased interest in gold to geopolitical instability and uncertainty in international trade, which is forcing investors to seek safe-haven assets.
Contrasting trends in different segments
Demand for gold bullion showed a significant increase of 21% in the second quarter, which helped to offset the continued decline in interest in gold coins.
Exchange-traded funds that are physically backed by gold received the largest inflows in the first half of the year since 2020, when the world was experiencing the COVID-19 pandemic.
Central banks, which are important buyers of gold, reduced their purchases by 21% to 166.5 tons in the second quarter. Nevertheless, the World Gold Council notes that the long-term trend of central banks’ reorientation from US assets to gold continues.
Interestingly, gold refining volumes increased by only 4% to 347.2 tons, remaining relatively moderate even at record prices. This is especially true in India, where consumers are more likely to exchange old jewelry for new ones or use it as collateral for loans.
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Jewelry industry under pressure from high prices
At the same time, the consumption of gold jewelry, which traditionally accounts for the bulk of the demand for physical gold, decreased by 14% to 341.0 tons. This is the worst figure since the third quarter of 2020.
The decline in demand in China and India, the key markets for gold jewelry, was particularly noticeable. The combined share of these countries in the global market fell below 50% for the first time in five years.
Forecasts for the second half of the year
WGC analysts expect further growth in gold ETFs in the second half of the year, while retail investment is likely to decline slightly. The organization has also adjusted downward its estimates of gold purchases by central banks for the current year.
The historical role and value of gold
Since ancient times, gold has played an exceptional role in the development of human civilization. The first evidence of its use dates back to around 4000 BC in ancient Egypt and Mesopotamia, where it was valued for its rarity, beauty and resistance to corrosion. Pharaohs and rulers demonstrated their wealth and power through gold jewelry, masks, and household items that later became priceless archaeological finds.
As trade developed, gold naturally evolved into a universal medium of exchange because it was portable, divisible, homogeneous, and had a stable intrinsic value. The first gold coins appeared around 700-600 BC in Lydia (modern Turkey), and subsequently the gold standard became the basis of the international monetary system for several centuries. Even after the abolition of the gold standard in 1971, when U.S. President Richard Nixon ended the convertibility of the dollar into gold, central banks continue to hold significant gold reserves as a strategic asset.
Since the beginning of its history, gold has symbolized not only economic wealth but also spiritual and cultural value. Many religious and cultural traditions have associated this precious metal with divine powers and eternity. Gold objects were used in rituals, temples and shrines, and in art, gold was often used to depict holiness, divine light and higher power. The cultural significance of gold is reflected in numerous myths, legends and literary works, from the legend of King Midas to the search for the golden fleece.
In the modern world, gold retains its role as a reliable store of value and a safe haven in times of economic crisis and geopolitical instability. Its value usually increases when confidence in paper currencies and financial markets falls. In addition to its investment value, gold is widely used in electronics, medical equipment, dentistry, and aerospace due to its unique physical and chemical properties – high electrical conductivity, corrosion resistance, and ductility. These features ensure that gold is in constant demand and make it not only a symbol of wealth but also a strategically important raw material for the development of high-tech industries.
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