Gold – Investment Surge Drives Global Demand as Jewellery Sales Decline
Gold – Global gold demand has climbed to an unprecedented level in calendar year 2025, largely fueled by a sharp increase in investment activity even as jewellery purchases weakened under the pressure of high prices, according to a recent report by CareEdge Ratings.
The report highlights that worldwide gold demand rose by nearly 8 percent compared to the previous year, reaching close to 5,000 metric tonnes. This marks the highest level ever recorded, achieved despite ongoing economic uncertainties and elevated gold prices across major markets.
Jewellery Demand Sees Noticeable Decline
One of the most striking developments during the year has been a clear shift in how gold is consumed globally. Traditionally, jewellery has dominated gold demand, but its share dropped significantly to around 33 percent in 2025. This is far below its historical average of nearly 50 percent.
Rising gold prices have played a major role in this change. Consumers, particularly in price-sensitive markets, have cut back on discretionary spending, including jewellery purchases. Instead of buying ornaments, many buyers are choosing to delay or reduce such expenditures.
Similar Trend Observed in India
The pattern seen globally has also emerged strongly in India, one of the world’s largest gold consumers. The share of jewellery in total gold demand in India fell to below 60 percent in 2025, compared to a long-term average of around 70 percent.
This decline reflects a broader change in consumer behaviour. Households are becoming more cautious with their spending, especially when it comes to non-essential purchases. High prices have made jewellery less accessible for many buyers, prompting a shift toward more practical or investment-oriented uses of gold.
Investment Demand Reaches New High
While jewellery demand weakened, investment demand for gold experienced significant growth. Globally, purchases of gold-backed exchange-traded funds, along with bars and coins, increased substantially during the year.
Investors have increasingly turned to gold as a safe-haven asset amid geopolitical tensions, inflation concerns, and volatility in financial markets. This trend has been particularly strong in uncertain economic conditions, where gold is often viewed as a reliable store of value.
India’s Growing Preference for Gold Investments
In India, the shift toward investment-focused gold demand has been especially pronounced. The share of investment demand in total gold consumption rose sharply to 42 percent in 2025, up from 29 percent the previous year.
This surge indicates that gold is no longer seen only as a cultural or ornamental asset. Instead, it is increasingly being treated as a financial instrument, with investors looking to diversify their portfolios and hedge against market risks.
Central Banks Continue Strong Buying
Another key factor supporting global gold demand has been continued purchases by central banks. For the fourth consecutive year, central banks around the world have maintained strong buying activity, adding significant volumes to their reserves.
This trend underscores gold’s importance as a strategic asset for reserve diversification. In an environment marked by geopolitical uncertainties and shifting economic dynamics, central banks are relying more on gold to strengthen their financial stability.
Changing Structure of Gold Market
Overall, the report suggests that while total gold demand remains robust, its composition is undergoing a meaningful transformation. The traditional dominance of jewellery is gradually giving way to rising investment demand.
This shift reflects broader economic realities and changing consumer priorities. As gold prices remain high and global uncertainties persist, investment demand is likely to continue playing a central role in shaping the future of the gold market.