GoldDemand – Investment Surge Pushes Global Gold Consumption to Record Levels

GoldDemand – Global gold consumption has climbed to an unprecedented level in calendar year 2025, supported largely by a surge in investment activity even as jewellery purchases weakened under the pressure of high prices.

Record Demand Despite High Prices

According to a recent analysis by CareEdge Ratings, total global gold demand rose by nearly 8 percent year-on-year, reaching close to 5,000 metric tonnes in CY25. This marks the highest level ever recorded, achieved despite ongoing macroeconomic uncertainties and elevated gold prices that typically dampen consumer spending.

The report highlights that while overall demand remains strong, the drivers behind this growth have shifted significantly compared to previous years.

Jewellery Demand Sees Noticeable Decline

One of the most striking changes observed is the reduced share of jewellery in total gold consumption. Traditionally accounting for around half of global demand, jewellery’s contribution dropped sharply to nearly 33 percent in CY25.

This decline is largely attributed to rising prices, which have made discretionary purchases less attractive for consumers. Buyers are becoming more cautious, prioritizing essential spending over luxury items such as gold ornaments.

A similar pattern has emerged in India, one of the world’s largest gold markets. Jewellery consumption in the country fell to below 60 percent of total demand, compared to its long-term average of around 70 percent. This shift reflects changing consumer behavior, with households adjusting to higher costs and economic uncertainty.

Investment Demand Gains Momentum

In contrast, investment demand for gold has surged globally. Increased inflows into gold exchange-traded funds (ETFs), along with higher purchases of gold bars and coins, have driven this growth.

Investors are increasingly viewing gold as a safe-haven asset amid geopolitical tensions, fluctuating financial markets, and concerns over global economic stability. This trend has been particularly evident in India, where investment demand rose significantly.

The share of investment-related gold consumption in India climbed to 42 percent in CY25, up from 29 percent in the previous year. This sharp rise indicates a growing preference for gold as a financial instrument rather than purely a cultural or consumption-driven asset.

Central Banks Continue Strategic Buying

Another important factor supporting global gold demand is sustained buying by central banks. For the fourth consecutive year, central banks have continued to accumulate gold reserves at a strong pace.

This strategy reflects efforts to diversify reserves and reduce dependence on traditional currencies, especially in the face of geopolitical risks and shifting global economic conditions. Gold’s stability and universal acceptance make it a key component of such diversification strategies.

Structural Shift in Gold Consumption Patterns

The report underscores that the gold market is undergoing a structural transformation. While overall demand remains robust, the composition of that demand is changing.

Jewellery, once the dominant segment, is gradually losing ground to investment-driven demand. This transition is evident across major markets, including India, and is expected to influence future trends in pricing, trade, and consumer behavior.

Outlook for the Gold Market

Looking ahead, analysts suggest that investment demand is likely to remain a key driver of gold consumption, particularly if global uncertainties persist. However, any stabilization in prices could potentially revive jewellery demand, especially in culturally significant markets.

For now, the data clearly points to a rebalancing of priorities among buyers, with financial security taking precedence over traditional consumption.