Global demand for gold shows no signs of slowing in 2025, with the precious metal surging 26% against the US dollar in the first half of the year outperforming nearly every other major asset class.
According to the latest report from the World Gold Council, investors and central banks have continued to flock to gold as a safe-haven asset amid ongoing market volatility, including trade tensions, shifting US policies, and geopolitical flash-points.
Total investment in gold exceeded 1,000 tonnes in the first half, the strongest performance since 2020. Bar and coin investments rose 11% year-on-year, with particularly strong demand from China and Eastern Europe. Gold-backed ETFs also saw significant inflows, with global holdings rising by 397 tonnes, driven by strong interest in Asia and the US.
While central banks continued to add to their reserves (purchasing 166 tonnes) they did so at a slower pace. Still, 95% of surveyed reserve managers believe global central bank gold reserves will rise over the next 12 months.
In the UK, demand jumped 17% year-on-year, with investors increasingly attracted to gold’s tax advantages. Paul Williams, Managing Director of Solomon Global, commented:
“The UK tax burden is set to hit a new high as a proportion of GDP, so investors aren’t just buying gold to diversify portfolios or for gold’s historical appeal or ability to preserve wealth. This trend reflects a growing awareness of the unique tax advantages that the precious metal offers. Gold is standing out to investors as a smart, tax-efficient alternative in the face of economic uncertainty and mounting tax pressures.”
With the macroeconomic outlook remaining uncertain, analysts suggest gold could trade within a tighter range in the second half of 2025. Still, any further global instability could boost its safe-haven appeal even more.
Further reading: Investors continue to opt for gold driving global demand – City AM | UK investors buy gold coins in record numbers to mitigate against tax – Financial Times
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Buying physical gold as an investment involves risk, as the value of precious metal prices can be volatile. Historical financial performance does not necessarily give a guide of future financial performance. We recommend that you conduct your own independent research and seek professional tax, legal and financial advice before making any investment decisions.
