Global gold demand hits record high in 2025 despite falling jewellery consumption: paradox explained.
In 2025, the global gold market experienced a striking paradox. Total demand for the precious metal reached an all-time high, yet traditional jewellery markets saw significant declines. This contradiction, record overall demand alongside weakening consumption in historically dominant sectors, reflects changing investor behavior, rising gold prices, and evolving regional trends.
Record Global Gold Demand in 2025
According to the World Gold Council’s Gold Demand Trends: Full Year 2025 report, total global gold demand exceeded 5,002 tonnes, marking the first time annual demand surpassed the 5,000-tonne threshold. With gold prices setting 53 new all-time highs during the year, total demand was valued at approximately $555 billion, up roughly 45% from 2024.
Investment demand drove this growth. Global gold investment surged 84% to 2,175 tonnes, the highest on record. The increase was fueled by gold-backed exchange-traded funds (ETFs) and retail buying of physical bars and coins. ETF inflows alone reached about 801 tonnes, surpassing jewellery demand for the first time.
Other segments showed mixed results. Central bank purchases remained elevated at around 863 tonnes, slightly below peak levels in previous years. Technology demand, used in electronics and industrial applications, remained stable at approximately 323 tonnes. Overall gold supply also rose, with mine output reaching about 3,672 tonnes and recycling increasing modestly.
Decline in Global Jewellery Demand
Despite rising overall demand, traditional gold-consuming sectors, particularly jewellery, weakened significantly. Global jewellery fabrication fell by about 18%, dropping to roughly 1,542 tonnes. Even so, the total value of jewellery purchases increased to 172 billion US dollars, reflecting higher gold prices.
India: Jewellery Demand Slumps Sharply
In India, one of the world’s largest jewellery markets, the decline was pronounced. Jewellery volumes fell approximately 24% to 430 tonnes, the lowest in nearly three decades outside the pandemic year of 2020. Despite lower volumes, the value of jewellery demand reached 49 billion USD, reflecting steep price increases. High gold prices, which rose more than 70% year-on-year, made traditional jewellery less affordable. Consumers delayed purchases or opted for smaller, lighter, or lower-carat pieces.
China: Investment Offsets Falling Jewellery
China’s total gold demand reached 1,003 tonnes, a six percent increase from 2024. However, jewellery demand declined by about 25%, similar to India, while investment in bars and coins rose nearly 28%. This shift indicates that Chinese consumers increasingly treated gold as an investment rather than a decorative item.
Other Regional Trends
In the United Arab Emirates, jewellery demand fell roughly 15%, again due to elevated prices. Across Asia, higher gold prices and investment-focused consumer behavior contributed to declining demand for traditional jewellery.
Why Gold Demand and Jewellery Consumption Diverge
Several factors explain this divergence:
- High Gold Prices: Record gold prices made jewellery purchases less affordable, particularly for heavier pieces in India and China.
- Investor Behavior: Economic uncertainty drove households and institutions toward gold as a safe-haven investment, boosting ETF inflows and purchases of bars and coins.
- Changing Consumer Preferences: Retail buyers increasingly prefer gold as a financial asset rather than for ornamentation, reflecting a long-term shift in consumption patterns.
- Central Bank Strategies: Central banks continued to buy gold strategically, maintaining historically high demand for reserves.
Implications for the Global Gold Market
The 2025 data highlight a structural shift in global gold consumption. Investment demand now plays a more dominant role than traditional jewellery, which historically drove global demand. Traditional markets are adjusting to price pressures, with consumption increasingly split between investment-oriented buying and jewellery purchases influenced by affordability.
Analysts predict that these trends may continue into 2026. Investment demand is expected to remain robust, particularly in times of economic uncertainty, while jewellery demand may only recover once prices moderate or income growth supports higher discretionary spending.
Conclusion
The gold market in 2025 demonstrates a clear shift in consumption patterns. Overall demand reached record levels, yet traditional jewellery markets in India, China, and other major regions experienced volume declines. The surge in investment demand, combined with high gold prices and central bank purchases, is reshaping the global gold market. Gold’s evolving role as both a financial asset and cultural commodity highlights the changing dynamics that will influence the industry for years to come.
