WGC: Investment Key Driver of Gold Demand in Q3 2025

Investors betting on gold as stagflation hedge

Much of 2025’s gold demand growth is due in large part to the investment segment, which year-to-date has reached 1,556 metric tons. That’s a mere 6 percent of the record reached in the first three quarters of 2020. In terms of dollar value, investors have purchased US$161 billion in gold assets in the first three quarters of the year.

Investor sentiment is increasingly leaning toward growing stagflation fears.

The Federal Reserve’s monetary policy is creating a favorable environment for gold as well.

“The lowering of rates again lowers the opportunity cost of holding gold in a portfolio,” he added. “So you’re looking at factors that are lining up for preservation of value and purchasing power against fiat currency and slow economic growth.”

That’s why in 2025 investors are piling into gold exchange-traded funds (ETFs), and adding gold bars and coins to their portfolios at a record pace, accounting for more than half of total demand compared to one-third last year. In response, WGC has revised their 2025 gold investment demand forecast upward.

Gold ETFs score strongest Q3 since 2020

Total investment demand for gold in Q3 2025 came in at 537.2 metric tons, up 13 percent over Q2 2025 and 47 percent from Q3 in the previous year.

Gold ETFs are the biggest driver in the investment demand segment in terms of gains, having attracted a lot of investor attention in 2025. The third quarter was emblematic of this trend, with gold ETF demand totalling 222 metric tons. That’s up 30 percent over the second quarter and posting a whopping 134 percent gain over Q3 2024. In terms of value, the quarter brought in a record US$24 billion in gold ETF inflows.

Cavatoni attributed the rapid growth in ETF demand to the realization among Western investors that risk and uncertainty are prevalent in the equity markets now. He added that the WGC definitely sees this trend continuing to shape demand for gold ETFs.

Year-to-date gold ETF inflows reached 619 metric tons at a value of US$64 billion. Regionally, the three biggest markets for gold ETFs so far this year have been North America (346 metric tons), followed by Europe (148 metric tons) and Asia (118 metric tons).

Despite higher prices for the precious metal, gold ETF inflows are still charging upward in the last quarter of the year. And according to the WGC report, “historical analysis suggests gold ETFs still have room to grow.”

Gold bar and coin demand remains strong

Fear of missing out, or FOMO, according to the WGC, has induced investors to continue to scoop up gold bars and coins even as prices for the metal skyrocketed in September. Hence, the third quarter of 2025 at 315.5 metric tons of gold purchases represents the fourth successive quarter that this segment of the market has seen demand levels above 300 metric tons.

All told, gold bar and coin demand in Q3 2025 was up 3 percent over Q2 2025 and 17 percent over Q3 2024.

Regionally, India was the brightest spot, accounting for 91.6 metric tons of gold bar and coin purchases in the third quarter with a record value of more than US$10 billion. India’s appetite for gold bars and coins surpassed even China, for which the WGC reported 73.7 metric tons, up 19 percent over the previous quarter.

The WGC attributed some of the increased demand to “jewellery consumers switching to lower-margin pure investment products”. This is a phenomenon unique to Asia where gold jewelry is traditionally a form of savings, wealth preservation and used for dowries.

On the flipside, the United States (7.2 metric tons) was the only regional market to experience a year-overy-yea decline (64 percent) in gold bar and coin demand. However, Cavatoni was quick to point out that there was actually a lot of buying and profit-taking based selling occurring in this space in the third quarter. Buying accelerated in September following news that gold bars would be exempt from Trump tariffs, and that trend has continued into October leading the WGC to forecast a stronger Q4.

“I suspect [Q4 is] going to tell us a different story, which is that most of the bar and coin demand in the Western markets, particularly the US will show a shift into net purchasing,” explained Cavatoni.

Central banks remain net buyers of gold

In the first nine months of the year, central banks bought 633 metric tons of gold compared to the 724 metric tons added during the same period in 2024.

Although the pace has slowed in recent quarters, central bank buying continues to be a major theme for the gold demand story. For Q3 2025, central bank inflows grew by 28 percent over the previous quarter to reach 220 metric tons.

The central banks of Poland, China, Turkey, Kazakhstan and India continue to be the predominant purchasers of gold. Interestingly, the quarter also saw a few participants enter the space who had hitherto been on the sidelines. This includes the central bank of Brazil (15 metric tons), which previously hadn’t made gold purchases since July 2021.

Cavatoni notes that central banks are still signalling they are keen to strategically build out their gold reserves despite record gold prices. “There’s trade tensions, geopolitical tensions. There’s fear and questions over the US’ desired outcome in terms of sanctions and control,” he explained.

“There’s also a dependency on the dollar and the euro. In our annual survey, the central banks continue to indicate to us that that dependency is going to lower over the next five years.’

In particular, he emphasized that the central banks in the emerging markets are looking for viable alternatives to dollar-based assets in order to diversify their reserves in the face of global and domestic challenges and they are finding that gold fits the bill.

For those reasons, the WGC has revised its expectations for gold demand from this segment. It now sees central banks picking up between 750 to 900 metric tons of gold for 2025.