Theme of the Day: Gold breaks records as investors seek shelter from market turbulence

The World Gold Council’s Q3 2025 Gold Demand Trends report reveals that quarterly gold demand (including OTC) reached 1,313t, or US $146bn in value terms and was the highest quarter for demand on record. The price rose 16% during Q3 and generated an average quarterly price of $3456.54/oz, up 40% y/y and 5% q/q.Growth was driven primarily by investment demand which accelerated in Q3 reaching 537t (+47% y/y) and accounted for 55% of overall net gold demand. This momentum was driven by a powerful combination of an uncertain and volatile geopolitical environment, US dollar weakness and investor “FOMO” as the price climbed higher.Investors continued to pile into physically backed gold ETFs for a third consecutive quarter, adding a further 222t with global inflows reaching $26bn. Year-to-date, gold ETFs have added a total of 619t ($64bn) to their holdings with North American listed funds leading the charge (346t), followed by European (148t) and Asian funds (118t).Bar and coin investment rose 17% y/y, totalling 316t, with growth in almost all markets but with significant contributions from India (92t), China, (74t). With the FOMO bar and coin trade in full swing – helped along by geopolitical concerns – we maintain our positive full-year estimate. Gold’s rapid price rise has not been a deterrent as it has been on occasion historically. On the contrary, retail activity chasing rising prices should be a boon for the sector, particularly following short-term corrections.On the other hand, gold jewellery demand was weighed down by 50 record gold prices this year, seeing a 19% y/y decline in consumption for Q3. While the two largest consumer markets - India and China – both saw a quarter-on-quarter uplift, largely due to seasonal factors, the y/y picture across both markets remained weak.Central banks picked up the pace in Q3 with net purchases totalling 220t in Q3, up 28% on Q2 and 10% y/y, despite the record-high gold price. On a year-to-date basis, net buying totalled 634t, trailing behind the exceptional highs of the last three years, but comfortably above pre-2022 levels.Technology demand was fractionally weaker compared with Q324. Support from growing AI demand met with headwinds from US tariff policy and the surging gold price.Total gold supply reached a quarterly record of 1,313t, up 3% y/y. Mine production increased by 2% y/y to 977t while recycling was up 6% y/y at 344t, staying relatively stable given the soaring gold price. Ramp ups and high margins continue to incentivise mine production. But outages and revisions might once again disappoint those expecting an annual record. Hedging is expected to be muted.Outlook: Given the pace of investment and price rises, we revise our FY 2025 investment materially higher and our jewellery expectations lower. All other forecasts remain largely unchanged as we head into the final quarter.