Gold demand forecast to remain strong in 2025

Gold demand to remain strong in 2025 amid uncertainties, says World Gold Council

 

The World Gold Council (WGC) predicts robust gold demand will continue into 2025, fuelled by persistent geopolitical and macroeconomic uncertainties that reinforce gold’s safe-haven appeal.  

 

The US dollar’s trajectory will remain a key price influencer.

 

Shaokai Fan, head of Asia-Pacific (excluding China) and global head of central banks at the WGC, told the news outlet Thansettakij that central-bank activity is expected to remain a primary market driver.  

 

He also anticipates support from gold ETF (exchange-traded fund) investors, particularly if interest rates fall, despite anticipated market volatility.

 

Demand for gold jewellery, however, may remain subdued because of high prices and slowing economic growth potentially weakening consumer spending. Continued geopolitical and macroeconomic uncertainties are expected to bolster gold’s demand as a store of value and a hedge against risk.

 


“In this new era marked by a new US administration, the world is facing increasing economic conflict and policy uncertainty,” Fan said. “We believe this could incentivise many investors to hold more gold, given its proven strength as a safe-haven asset during times of uncertainty.”


 

The prevailing view is that the US Federal Reserve will continue cutting interest rates in 2025, although perhaps less aggressively than previously forecast. The Fed’s policy decisions and the US dollar’s direction will remain crucial factors affecting gold prices.
 
However, recent trends indicate these are not the only factors determining gold’s performance. A more dovish Fed stance would generally benefit gold prices. Conversely, prolonged delays in rate cuts or a policy shift could dampen investment demand.

 


“Amidst these uncertainties, we expect central banks globally to continue purchasing gold at a healthy pace, while investment in gold ETFs is likely to increase if interest rates continue to decline. All these factors will contribute to higher gold prices,” Fan said. 


 

While the WGC doesn’t directly forecast gold prices, it offers insights into factors influencing demand, which ultimately affects prices. In Thailand, prices are influenced by both global demand and the Thai baht’s strength against the US dollar.

 

A weaker US dollar is possible thanks to its current overvaluation and pressure from the US administration to lower interest rates and boost competitiveness. Thailand has become a strong consumer gold market within Southeast Asia.

 

Despite high prices in 2024, Thai jewellery demand fell by only 2% year on year, compared with an 11% global decline. Strong domestic economic conditions, particularly the thriving tourism sector, are considered a supporting factor.

 

Furthermore, Thai demand for gold bars and coins surged in the fourth quarter of 2024, reaching 14.6 tonnes and a full-year total of 39.8 tonnes, a 17% increase. This made Thailand the world’s seventh-largest market for gold bars and coins in 2024.

 

Regarding gold’s safe-haven status in 2025, geopolitical and macroeconomic uncertainties are expected to remain prominent, supporting demand for gold as a store of value and risk mitigation tool.
 
While gold’s growth in 2025 may be less dramatic than in 2024, it will remain crucial as a long-term strategic asset and a key component of portfolio diversification, given its safe-haven status during economic uncertainty.

 


“In 2025, we expect central banks to remain a primary driver of the gold market, while investors in gold ETFs are also likely to contribute to demand, especially if interest rates decline. This trend is expected to become even more pronounced, even with interest-rate volatility.” Fan said. 


 

In 2024, central-bank gold demand exceeded 1,000 tonnes for the third consecutive year, totalling 1,045 tonnes. Further purchases exceeding 1,000 tonnes are possible in 2025. Increased demand from gold ETFs also boosted overall investment sentiment.

 

US-listed funds attracted inflows into gold ETFs, particularly in the second half of the year. Global gold investment reached a four-year high in 2024, generating annual returns of nearly 26%, with a total investment value of 1,180 tonnes, equivalent to around US$90 billion.

 

Regarding China’s economic recovery, while jewellery demand improved in Q4, it was significantly lower year-on-year.

 


“Full-year demand was down to 479 tonnes,” Fan explained.  “Throughout 2024, the Chinese jewellery market faced a very challenging environment. Looking ahead, with gold prices reaching new highs in early 2025, we expect Chinese jewellery demand to remain subdued, although the rate of decline is likely to slow.”


 



 

Conversely, Chinese investment demand rebounded in Q4, pushing the full-year total to a more than 10-year high, amid domestic economic uncertainty, record-low government bond yields, and stock market volatility.  

 

Coupled with a sluggish property market, Chinese investors faced limited options and turned to gold. Chinese investment demand is expected to remain strong in 2025, driven by macroeconomic factors and anticipated further interest-rate cuts.

 

If the People’s Bank of China (PBOC) continues announcing gold purchases, investor confidence could increase. However, gold’s performance relative to other assets will remain key. 

 

Chinese investors may shift focus to domestic assets, such as the stock market, if they offer stronger returns.

 

The PBOC reported total gold purchases of 44 tonnes in 2024. From January to April, the bank purchased 29 tonnes before pausing for six months and resuming in November. At the end of 2024, the PBOC held 2,280 tonnes of gold, representing 5% of China’s total foreign-exchange reserves.

 

The top 10 countries for jewellery demand in 2024 were: India (563.4 tonnes), mainland China (479.3 tonnes), United States (132.1 tonnes), Russia (41.2 tonnes), Turkey (40.9 tonnes), Saudi Arabia (35.0 tonnes), UAE (34.7 tonnes), Hong Kong (27.9 tonnes), Iran (26.7 tonnes), and Egypt (26.1 tonnes), with global demand totalling 1,877.1 tonnes.

 

The top 10 countries for gold bar and coin demand in 2024 were: mainland China (336.2 tonnes), India (239.4 tonnes), Turkey (112.2 tonnes), United States (77.8 tonnes), Iran (42.3 tonnes), Vietnam (42.1 tonnes), Thailand (39.8 tonnes), Russia (34.4 tonnes), Indonesia (24.5 tonnes), and Egypt (24.0 tonnes), with global demand totalling 1,186.3 tonnes.

 

Regarding technology and artificial intelligence (AI), annual gold demand in the tech sector increased by 7% to 326 tonnes in 2024, with Q4 demand reaching 84 tonnes, the strongest quarter since Q4 2021.

 

The recovery was largely driven by continued strong demand for high-end AI infrastructure, and the WGC expects ongoing investment in AI and related infrastructure to keep technology-sector gold demand robust in 2025.

(2025/02/10-00:00)