Central banks to continue their gold buying spree in 2025, says WGC report

Gold demand was up 1% last year

Central banks will continue to dominate demand for the yellow metal in 2025 along with ETF investors as they view gold as a risk hedge amid growing economic and geopolitical uncertainty, said the World Gold Council in a report.

"In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates," WGC senior markets analyst Louise Street, said.

Spot gold prices rose 27% last year as the demand for the yellow metal remained robust not just from the central bankers but investors who chose the metal as a hedge against growing uncertainty.

Central banks bought more than 1,000 tons of gold for third year in a row last year. The National Bank of Poland along with the Reserve Bank of India and the central bank of Turkey remained the top buyers boosting their reserves as they look to diversify away from dollar assets.

Overall demand was up 1% last year at 4,974 tons but there was a drop in jewellery demand

Total gold demand rose 1% to an annual record of 4,974 tons last year, according to the report. Gold jewellery consumption, the biggest category of physical demand, fell 11% in 2024, while mine production was steady and recycling rose 15%.

The WGC expects jewellery demand to remain under pressure and recycling to rise further this year due to high prices.