Gold is undergoing an unprecedented rally in 2025, alongside a simultaneous rise in global stock indices. Worldwide demand for the precious metal soared in the second quarter, reaching an astronomical value of $132 billion – the highest level ever recorded, according to the latest report by the World Gold Council (WGC).

This dramatic surge is attributed both to massive capital inflows from investors and to the record average price of $3,280.35 per ounce. Although consumption volume rose by just 3% (1,249 tonnes), its value skyrocketed by 45% year-on-year.

Investment activity is the key driver of this trend, with a strong focus on ETFs and physical gold, while Citi expects a new price record within the quarter.

Strong Investment Demand – Slower Buying by Central Banks

Investment inflows rose by 78% quarter-on-quarter, with ETFs accumulating 170 tonnes of gold, and demand for bars and coins remaining robust, especially in China and Europe.

China saw a historic shift, with individual investment surpassing jewelry purchases. In contrast, central banks – though still buying – are slowing down: they acquired 166 tonnes, 33% less than the previous quarter, but 41% more than the 2010–2021 average.

WGC research indicates that the outlook for reserve accumulation remains positive.

Jewelry Demand Collapses – Gold Use in Tech Also Down

Gold consumption for jewelry fell significantly, down 30% compared to the five-year average, to 341 tonnes. The two largest markets, China and India, together accounted for less than 50% of global demand – something that has only happened three times in the past five years.

Gold use in technology also declined by 2%, mainly due to reduced exports and slowing manufacturing in East Asia. However, growing use in AI applications is partially offsetting the drop.

Record-High Production – Limited Flow from Recycling

Global mine production reached 909 tonnes in the second quarter – the highest level ever recorded for the period – boosting total supply by 3%.

Recycling increased by 4%, reaching 347 tonnes – the largest amount since 2011 – yet gold holders continue to avoid liquidations despite high prices.

The WGC predicts that investment momentum will remain strong through the rest of the year, though it may slow due to a strengthening dollar and rising equity trends. Still, a potential interest rate cut by the Fed is expected to provide renewed impetus.

Markets are already pricing in an 85% chance of a U.S. interest rate cut in September, according to CME’s FedWatch, as weak employment performance has reactivated scenarios of monetary easing.
$3,500 – and Climbing

Citi has revised its gold price forecast upward to $3,500 in the coming quarter, citing a U.S. slowdown, inflation and tariff concerns, and a weakening dollar.

Gold has already gained nearly 30% since the start of the year. This momentum is expected to continue, especially if the Fed moves toward easing and geopolitical and trade tensions persist with countries like India, Canada, Brazil, Taiwan, and Switzerland.

Gold is reasserting itself as a safe-haven investment in a volatile environment, going beyond its traditional role as an inflation hedge. If the U.S. central bank proceeds with rate cuts and geopolitical pressures intensify, 2025 could become a landmark year for the precious metal.