The price of gold has begun a new wave of increase, hitting a record high of $3,728 per ounce on Monday (September 22nd), continuing its upward trend that has doubled since the end of 2022. Due to various factors, it is expected that demand for gold will remain strong for some time.
Central banks buying gold and strong investment demand, as seen in the inflow of funds into exchange-traded funds (ETFs) supported by physical gold, are major driving forces behind the rise in gold prices. Global trade tensions, ongoing wars, and factors such as the psychological impact of the Federal Reserve’s interest rate cuts have also intensified the rise in gold prices.
At the same time, recent economic data released by the United States reveals a series of problems that the country is currently facing, including a sluggish labor market and increasing downward pressure on the economy. In this situation, many funds are beginning to shift towards safe-haven assets like gold to seek protection, prompting a new round of gold price increases.
A Reuters article delves into various aspects of the gold market trends.
According to consultancy firm Metals Focus, since 2022, the net annual gold purchases by central banks have exceeded 1,000 tons each year, and it is expected that central banks worldwide will purchase 900 tons of gold this year, which is double the average purchase volume of 457 tons from 2016 to 2021.
The World Gold Council mentioned that official data submitted to the International Monetary Fund only reflects an estimated 34% of total gold demand by central banks in 2024.
From 2022 to 2025, these countries contributed 23% of the global annual gold demand, which is double the average level of the 2010s.
Since 2015, China has increased the proportion of gold in its foreign exchange reserves from 1% to 6.8%.
Data from the World Gold Council shows that in the second quarter of 2025, demand for gold jewelry, the main source of physical gold demand, decreased by 14% to 341 tons, reaching the lowest level since the outbreak of the pandemic in the third quarter of 2020 due to high prices discouraging buyers.
The World Gold Council estimates that the high prices leading to decreased demand have caused the total market share of the largest gold markets, China and India, to fall below 50% for the third time in the past five years.
Metals Focus estimates that gold jewelry production volume dropped by 9% to 2,011 tons in 2024, and it is projected to decrease by an additional 16% this year.
There have been significant changes in demand for different products in the retail investment market, but the total purchasing volume in this field remains strong.
According to the World Gold Council, demand for gold bar investment increased by 10% in 2024, while purchases of gold coins declined by 31%, and this trend continues into this year.
Metals Focus predicts that due to high demand in Asia driven by optimistic price expectations, net physical investment is set to grow by 2% this year, reaching 1,218 tons.
The World Gold Council states that gold ETFs have become a more significant source of gold demand this year, with inflows totaling 397 tons from January to June, marking the highest inflow in the first half of a year since 2020.
By the end of June, the total holdings of gold ETFs reached 3,615.9 tons, the highest level since August 2022. Five years ago, the highest holdings of gold ETFs were at 3,915 tons.
Metals Focus forecasts that after an outflow of 7 tons in 2024, the net investment in ETFs in 2025 will reach 500 tons.