Still Going Strong: Gold demand hits a NINE-year March quarter high

• Gold demand hit a nine-year March quarter high, putting solid fundamental base under record price run
• Investors flooded into the market, with demand from that sector up 170% year on year to a three-year high
• Still room for ETF inflows to pick up as specialists await generalist buyers

Gold ETF inflows surged in the March quarter as investment demand rose 170% YoY to hit a three-year high of 552t.

Those are the latest figures out of the World Gold Council, which suggested gold demand overall rose 1% YoY to 1206t, a nine-year high for a March quarter.

It comes after a record year for gold demand in 2024 and provides a firm grounding for the price action seen so far this year, with gold rising as high as US$3500/oz in April amid the market madness that followed Trump’s declaration of tariffs across America’s entire trade universe.

Bar and coin demand remained elevated at 325t, a 15% lift on the five-year quarterly average. And central banks remained buyers, hoovering up a net 244t in Q1, led by Poland.

The price of gold averaged US$2860/oz across the first three months of 2025, up 38% YoY, but it’s since climbed even higher to US$3317/oz ($5170/oz) as of Tuesday – up around 28% on the end of 2024.

Gold’s status as the world’s emerging safe haven investment shone, with investment demand “extraordinarily strong” in the March quarter according to WGC global head of central banks and head of Asia-Pacific Shaokai Fan.

“I think some of the narratives we heard a few weeks ago included whether or not the US Treasury market was still the safe haven of choice, whether a lot of investors were considering moving away from Treasuries and away from the US dollar in general,” he told Stockhead.

“If the biggest safe haven asset class in the world is no longer a safe haven, then where do you move to as a safe haven? Gold is often probably the answer that crosses people’s minds the most.”

More upside?

Is there more upside to come?

The World Gold Council does not forecast prices. But Fan noted while ETF holdings were at their record for value in the March quarter, they remain off their highs in terms of tonnages.

“Investment demand in general, but led by ETF demand in terms of at least grabbing the headlines, was a stellar performer in Q1,” he said.

“We saw up 226 tonnes in just ETF demand alone, bringing ETFs to their highest level of value, but I think actually we’re still short of the peak in terms of the highest level of tonnage being put into gold ETFs.

“North American ETFs led that, but also Asian ETFs saw pretty strong inflows as well in Q1. But just anecdotally, in April, the inflows into Asian ETFs already exceeded the Q1 inflows into Asian ETFs for gold. So, I expect April to be a pretty stellar month.”

While there’s no specific data on how investors have allocated gold in their portfolios, Fan said anecdotally investors appeared to be underweight gold.

“I think that the penetration level is still somewhat low,” he said.

“If you look at these massive inflows in the gold ETFs, they’re very big, but if you compare them to inflows or outflows from other ETFs that have been moving around lately, the size is still not quite the same order of magnitude.

“I do think that there’s still quite an ample bit of room for investors, ordinary investors, to have more exposure to gold and to learn more about the gold story.

“If anything, because gold’s been in the headlines so much in the last few weeks, it probably has attracted more people to investigate gold.”

That’s reflected in Google searches and queues forming outside sellers like gold refinery ABC Bullion’s Martin Place shopfront in Sydney.

Indeed Australian bar and coin demand, while a small part of the global market, surged 44% to 3.1t in Q1, with US$255m or 2.8t flowing into gold ETFs in the country, taking assets under management to a record high of US$4,5bn.

Central Bank on it

Record high prices limited jewellery demand in tonnage terms, down 21% YoY to 380.3t, though consumer spending on gold jewellery rose 9% YoY to US$35bn.

Central bank net purchases were also some 21% lower YoY to 244t, but that remains within range of the average for a quarter over the past three years, when sovereign purchases have tallied ~1000t.

Poland was the leading buyer, adding a further 49t to its holdings.

“The neighbourhood that they’re sitting in is relatively close to Russia. So wanting to have a little bit more stability, a little more resilience in their portfolio makes sense,” Fan said.

“The fact that they are not in the Eurozone, they’re on the Eurozone periphery, so they don’t have the capabilities and the massive sort of resources of the ECB to help them if they come into a crisis.

“Poland’s the biggest one, but the Czech Republic has been consistently buying gold for the last two, three years as well. Hungary was a big buyer a few years ago. Serbia and Croatia were buyers.

“That whole region actually has been pretty important to the central bank gold buying story.”

While gold prices may not be predictable, Fan says recent events has ensured a seat at the household dinner table for the precious metal.

“Anyone who’s willing to predict anything in this environment is probably not worth their salt,” he said.

“I do think that overall attention has been drawn a lot more into gold.

“Gold is now much more front and centre in people’s minds and it might be a little bit more embedded into the global conversation now, especially now that we’re talking about the US really retreating away from its traditional role in global politics.

“But also concerns about the financial infrastructure built around that global role as well, and the status of the Treasury market, the status of the US dollar, and also potential recession in the US, globally as well. So these are all things to look out for.”

Fan warned that things could always “turn on a dime”.

“If Trump rolls back all tariffs tomorrow, then I wouldn’t be surprised if there’s outflows from gold ETFs,” he said.