World Gold Council or WGC stated in its latest Gold Demand Trends update that total Q1 global gold demand (inclusive of OTC investment) was 1% higher y/y at 1,206 tonnes (t) – the highest for a first quarter since 2016. Central banks bought 244t of gold in Q1, a slowdown from the previous quarter but comfortably within the quarterly range of the last three years.
A sharp revival in gold ETF inflows fuelled a more-than-doubling of total investment demand to 552t (+170% y/y); its highest since Q1’22. Bar and coin demand remained elevated at 325t – 15% above the five-year quarterly average. China drove much of this increase, posting its second-highest quarter of retail investment.
Technology demand of 80t was unchanged y/y. Ongoing AI adoption drove continued growth in the electronics sector, but uncertainty over tariffs makes for a challenging environment for the remainder of the year. Gold jewellery demand fell sharply in the record price environment though: volumes reached their lowest since demand was halted by COVID in 2020. In value terms, consumer spending on gold jewellery grew 9% y/y to US$35bn.
Total Gold demand in value terms almost matched the Q4 record of US$111bn. The slight uptick in demand volumes translated to a 40% y/y rise in value, due to the surging price, WGC noted. Total Q1 gold supply grew 1% y/y to 1,206t. Global Gold mine production inched up to a Q1 record of 856t. In contrast, recycling declined 1% y/y as consumers held onto their gold hoping for higher prices.