Louise Street, Senior Markets Analyst at the World Gold Council, underscored the impact of economic instability on the gold market. "2025 saw surging demand for gold and rocketing prices. Consumers and investors alike bought and held gold in an environment where economic and geopolitical risks have become the new normal," she explained. Street noted that investment demand was a major force, with investors eager to access gold through various channels. Despite a 67% increase in gold prices, jewellery demand only dipped by 18% year-on-year, demonstrating consumers' willingness to purchase at elevated prices. "With economic and geopolitical instability showing little sign of retreat in 2026, momentum from last year’s strong gold demand is likely to persist," she added.

The report highlights significant gains in the two major markets, China and India, where demand increased by 28% and 17% year-on-year, respectively. These two countries accounted for more than half of the global demand in the investment category, reflecting a broader trend of investors seeking safe havens amidst uncertainty.

Central banks also played a crucial role in the gold market dynamics of 2025. The official sector added 863 tonnes of gold, maintaining elevated demand levels, although slightly below the 1,000-tonne mark reached in the previous three years. This sustained buying activity underscores central banks' commitment to bolstering their reserves amid ongoing global challenges.

Meanwhile, the jewellery sector experienced a softening in demand, with an 18% decline compared to 2024. However, the total value of gold jewellery demand increased by 18% year-on-year to US $172 billion. This indicates a sustained consumer interest in gold jewellery, even as prices reached new highs.

In Australia, the gold market followed global trends, with notable increases in demand for physical gold. Shaokai Fan, Head of Asia (ex-China) and Global Head of Central Banks at the World Gold Council, provided insights into the Australian market dynamics. "Australian investors continued to lean into gold in 2025, with demand for physical bars & coins rising 35% year-on-year to 15 tonnes," he said. Fan highlighted a significant 45% year-on-year surge in demand during the December quarter, reflecting growing confidence in gold as a long-term investment.

Fan also pointed out the growth in Australian gold ETFs, with holdings rising by 9.4 tonnes to reach 52 tonnes by the end of 2025. This increase lifted ETF assets under management (AUM) by US $1 billion, marking the largest annual increase on record. "Where we believe demand has shifted most meaningfully since 2020 is in investor intent. Rather than responding to crisis-driven market stress, investors are increasingly turning to gold as a strategic portfolio diversifier," Fan noted. He suggested that this evolving appreciation of gold's role in Australian portfolios is happening despite the country remaining under-allocated relative to other major markets.

Despite a 22% decline in jewellery demand, total Australian gold consumption rose by 11% year-on-year in 2025. Fan described the jewellery market as "relatively resilient" given the significantly higher gold price environment.

The World Gold Council's report, which includes comprehensive data from Metals Focus, highlights the shifting dynamics of the gold market in 2025. As geopolitical and economic uncertainties persist, the role of gold as a safe haven and strategic asset is likely to remain significant in the coming year.