Gold Demand Shatters Records as Prices Soar Past Historic Highs

Investment Surge Drives Historic Demand

Global gold demand surged past 5,000 tons in 2025 for the first time on record , marking a watershed moment for the precious metal as investors sought refuge from mounting economic and geopolitical uncertainties. Combined with the record-breaking run in the gold price – setting 53 new all-time highs during the year – this yielded an unprecedented value of US$555bn (+45% y/y) .

Heightened investment activity drove overall demand growth: global gold ETF holdings grew 801t – the second strongest year on record – while bar and coin buying accelerated to reach a 12-year high . US gold demand rose 140% y/y to 679t in 2025. This marked the highest level of demand since 2020 and driven almost entirely by ETF investment. US gold-backed ETFs attracted 437t of demand .

Safe-haven and diversification motives were consistent themes driving investment interest throughout the year, along with price-driven motivations . At the macro level, intensifying geopolitical and geoeconomic tensions, combined with a weaker US dollar and modestly lower interest rates, prompted investors to seek both safe‑haven assets and portfolio diversification .

Central Banks Remain Major Buyers

Central bank purchases of 863t reached the upper end of our expected 2025 range; they remain historically elevated and geographically widespread but have slowed from their recent pace . Goldman estimates central-bank purchases are now averaging around 60 tonnes a month, far above the pre-2022 average of 17 tonnes, with emerging-market central banks continuing to shift reserves into gold .

The National Bank of Poland emerged as the largest buyer for the second consecutive year, adding 102 tons in 2025 and lifting its gold reserves to 550 tons. Gold now accounts for 28 percent of Poland's total reserves, approaching its revised 30 percent allocation target. In January, the bank's governor signaled an intention to increase reserves further to 700 tons, citing national security considerations .

Prices Reach Unprecedented Levels

The LBMA (PM) gold price set 53 new all-time highs during 2025. The average Q4 price was a record US$4,135/oz (+55% y/y), resulting in the highest annual average of US$3,431/oz (+44% y/y) . The momentum has continued into 2026, with gold priced at $5,520 per ounce as of January 29, 2026 .

The New York spot gold price is up 19.5% in the year through Jan. 28, marking its best start to a year since 1980, when it rallied about 20.1% in US dollar terms over the same period . The decline followed a sharp rally that pushed bullion to a record $5,608 on Thursday, leaving prices still on track for a sixth consecutive monthly advance and the strongest performance since the 1980s .

Supply Struggles to Keep Pace

Total gold supply rose just 1 percent year-on-year to 5,002 tons, the highest level in the WGC's annual data series dating back to 1970. Mine production inched up to an estimated 3,672 tons, potentially setting a new record, while recycling increased only 3 percent to 1,404 tons. This was a muted reaction given the 67 percent rise in the US-dollar gold price .

Looking to the year ahead, with continued geopolitical tensions we expect another year of strong gold ETF inflows and robust bar and coin demand, underpinned by elevated central bank buying . Goldman recently lifted its December 2026 gold price forecast to $5,400 an ounce, up from $4,900 previously, arguing that hedges against global macro and policy risks have become "sticky," effectively lifting the starting point for gold prices this year .