Total gold demand in the three months to March was 1,206 tonnes, 1 per cent higher year on year and the highest first quarter since 2016, according to the World Gold Council.
This comes as the price of gold grew by more than 15 per cent over the first three months of the year – it was also in March that the yellow metal cracked US$3,000 per ounce for the first time.
While central bank buying saw a slowdown from the previous quarter, a sharp revival in gold exchange-traded fund (ETF) inflows fuelled a more-than-doubling of total investment demand to 552 tonnes – marking a 170 per cent rise – its highest since 1Q22.
“Gold’s price rise dominated headlines in recent months as it repeatedly set new record highs,” the council said.
“The latest leg of the uptrend was set in motion by a pick-up in investment flows in January, initially sparked by US tariffs and cemented by concerns over erratic and unpredictable US policy announcements, fears of stagflation and/or recession, continued geopolitical jitters and the consequent turmoil in equity markets of such an uncertain environment.
“Global demand for ETFs – which has been positive in 10 out of the last 12 months – accelerated in Q1. Already encouraged by gold’s price momentum, investors spooked by somersaulting US tariff policy rushed for the safety of gold.”
Globally, gold ETFs saw a striking start to the year, with holdings increasing by 226 tonnes during Q1, taking collective holdings to 3,445 tonnes.
This was the highest amount recorded since May 2023 but still below the historic peak from November 2020, when holdings were 3,929 tonnes.
Looking at Australia, Australian gold ETFs also registered sizeable inflows, amounting to US$255 million and pushing their total assets under management to US$4.5 billion or 45.3 tonnes – both record highs.
In terms of bar and coin demand, Australia also had the strongest year-on-year growth across the entire Asia-Pacific, rising 44 per cent to 3.1 tonnes in the March quarter.
“After slow but steady growth in demand for gold as an investment, Australians became active buyers of gold bars and coins, contributing to a 23 per cent increase in local gold consumption during Q1,” Shaokai Fan, head of APAC (ex-China) and global central bank lead at the World Gold Council, said.
“Meanwhile, Australian investors continued to add gold ETFs to their portfolios at a healthy pace.”
Fan explained that locally, these strong buying trends continued last month, with Australian investors adding US$76 million gold ETFs, pushing them further into record territory.
“We see this demand as due to the same drivers that pushed demand higher in Q1 – gold’s record-breaking price, extreme global trade uncertainties and their implications for Australia’s economy, stock market volatility and growing expectations of RBA rate cuts – all of which are providing strong tailwinds for gold investment in Australia.”
Looking forward, the council said that the first few weeks of Q2 have seen an acceleration in demand for global gold ETFs, most notably in Asia, where flows have already surpassed their Q1 total.
The international trade association believes that, should demand continue at the current pace, markets are poised to see the strongest three-month consecutive run of inflows since the outbreak of COVID-19 drove investors to gold in 2020.
