Global gold demand soared alongside the precious metal’s price to a high not observed since 2016 during this year’s first quarter.
The World Gold Council, a prestigious non-profit organization with high-profile members like Newmont Corporation (TSE: NGT) (NYSE: NEM) (FRA: NMM) and Barrick Gold Corp (TSX: ABX) (NYSE: GOLD), said a massive investment inflow into exchange traded funds (ETFs) was the primary cause.
The dollar-figure invested into physical gold ETFs during the first quarter of 2025 grew by US$21 billion. Moreover, it shot up by 170 per cent year-over-year in terms of quantity to 552 tonnes.
Meanwhile, the demand for gold bars and coins rose by 325 tonnes — 15 per cent higher than the quarterly average over the past five years. An increased rate of purchases in China was the primary driver, the WGC report specified.
Trade turmoil combined with geopolitical tensions and fears of economic unrest have made the commodity an increasingly appealing investment choice.
“As turbulent times persist, safe haven demand for gold from institutions, individuals and the official sector could climb higher in the months to come,” WGC senior analyst Louise Street explained.
The non-profit says that total demand during Q1 was equal to 1,206 tonnes of the yellow metal.
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World Bank report shares similar sentiment
This major financial institution said Tuesday that political and economic uncertainty will continue to propel demand for the foreseeable future.
“Strong safe-haven demand for gold is expected to persist in the near term, buoyed by uncertainty, geopolitical tensions, and concerns about volatility in major financial markets,” World Bank analysts highlighted. “If geopolitical tensions and policy uncertainty become even more pronounced, gold prices could exceed current projections.”
The international investment bank has predicted that gold prices will rise by 36 per cent throughout 2025.
Furthermore, others are saying that an increasing lack of faith in the American dollar in particular will drive up gold prices.
Renowned investor and gold enthusiast, John Paulson, just predicted that the spot price could be sitting in the “high US$4,000 range” by 2028. Wariness about the value of Federal Reserve notes among many was a significant factor in his assessment.
His thoughts are shared by academics in Hong Kong too.
“Gold has benefited tremendously from the erratic exercise of power by President Trump,” said University of Hong Kong professor Chen Zhiwu, “making the U.S. dollar and dollar assets less trustable and forcing international investors to diversify away.”
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