Gold continues to glitter as investor demand reaches record highs
Gold has continued its record breaking rally, as investors and central banks scramble to get their hands on the safe haven asset in the face of ongoing geopolitical uncertainty.
Total gold demand exceeded 5,000t for the first time in 2025, with the precious metal setting a staggering 53 new all time highs during the year.
The report attributed the rocketing demand to heightened investment activity as investors look to swerve market volatility as “economic and geopolitical risks have become the new normal”.
Louise Street, senior market analyst at the World Gold Council, said: “Annual demand last year was at a record high…primarily driven by this massive increase in investment across the board.
“That’s all been driven by safe haven and diversification flows in the environment that we’re in, very heightened geopolitical risk and instability, dollar weakness and excessive stock market valuations.”
Central bank buying also remained resilient, with demand rising six per cent in the final quarter of the year compared to the prior one, to 230t.
However, demand was somewhat modest during the year, due to central banks attempting to navigate consistent rapid rallies in prices, with elevated valuations prompting a more cautious approach.
While demand bounced back in the fourth quarter, bringing the full year total to 863t, this was below the 1,000t levels seen in the preceding three years.
Investment demand breaks new ground
Gold investment appetite smashed the previous annual record of 1,744t, which it had held since 2020, reaching a landmark 2,175t.
This pushed the value of total annual gold investment to $240bn, as investors piled into ETFS, bars and coins.
Total bar and coin investment demand jumped by a third in the fourth quarter to 420t, while also increasing by a third year on year.
This generated the highest annual total since 2015 reaching $154bn, with more than half of the total demand coming from India and China, with the depreciating rupee.
Europe also reported fourth consecutive quarters of year on year growth, with investor interest fuelled by bullish price related motivations and the desire to have a safe haven asset.
However, the US failed to generate growth for coins and bars, with investment rising by just eight per cent to $7bn.
Appetite for gold-backed exchange-traded funds (ETFS) also continued to rocket, with holdings surging to an all time of 4,025t, while annual inflows reached a record breaking $89bn.
Investors were attracted to the asset’s rising price and subsequent inflows, with more than half of the increase in demand funnelled into North American funds.
This was caused by fears of an AI bubble assisting and equity volatility, with Asian funds posting the second strongest increase.
Street also noted that coin demand in Japan was strong, due to younger investors entering the market.
She said: “A lot of older investors in Japan have gold that they bought a long time ago, so typically what we’ve seen in recent years is when the gold price tends to rise, this gold comes back onto the market as they take profits.
“But increasingly…we’re seeing the young generation come through and they’re now much more inclined to buy.”
Tech, mining and 2026 outlook
Demand for gold in the tech sector also held steady, with full year demand reaching 323t, after demand for AI related electronics was tempered by ongoing volatility in traditional consumer electronics.
Annual mine production also reported a fractional rise, driven by record mine production and higher recycling supply, with Africa and Asia seeing the most notable growth, with Ghana posting a 24 per cent year on year increase.
But several countries, such as Argentina and Mexico, reported a fall in production due to operational factors, such as Argentina and Mexico.
The council expects demand to remain high into 2026, supported by macroeconomic tensions and robust central bank demand caused by “crisis protection”, with the gold price already pushing past $5,0000 in January.
Street said: “We’ve seen quite a few banks come out and announce that they are either thinking or planning to actually continue to increase [their reserves].
“With economic and geopolitical instability showing little sign of retreat in 2026, momentum from last year’s strong gold demand is likely to persist.”