Central Banks and Investors Fuel Gold's Record $146B Surge in Q3 2025

Global gold demand surged to a record high in the third quarter of 2025, driven by robust investment flows and central bank purchases, according to a World Gold Council report. Total demand reached 1,313 metric tons, a 3% year-on-year increase, while the value of demand jumped 44% to $146 billion, the highest quarterly total in the WGC's data series. The surge was fueled by a 47% year-on-year rise in investment demand, with ETF inflows alone hitting $26 billion and physical bar and coin purchases climbing 17%, according to a Reuters report.

The gold price, which hit a record $4,381 per troy ounce in October, rose 16% during the quarter, averaging $3,456.54/oz. Analysts attribute the rally to geopolitical tensions, U.S. tariff uncertainties, and a "fear of missing out" (FOMO) effect as investors sought safe-haven assets, according to a City A.M. article. Louise Street, senior markets analyst at the WGC, noted that "the market is not yet saturated," with ETF inflows and central bank buying expected to remain strong amid continued dollar weakness and stagflation risks, according to the Wall Street Journal.

Central bank purchases accelerated in Q3, with 220 tons acquired—28% higher than the previous quarter and 10% year-on-year. While this marked a slowdown compared to the 724 tons purchased in the first three quarters of 2024, the WGC highlighted that global central banks have added 634 tons year-to-date, reflecting a long-term trend of diversification. Meanwhile, jewelry demand continued to decline, falling 19% year-on-year to 371 tons as high prices deterred consumers.

Supply also hit a record 1,313 tons, driven by a 2% increase in mine production and stable recycled gold flows. Recycling activity, however, was tempered by expectations of further price gains and strong economic conditions. On the investment front, over-the-counter (OTC) demand added 55 tons in Q3, reflecting sustained interest from institutions and high-net-worth individuals, particularly in September.

The WGC's findings align with broader macroeconomic trends. Global central banks executed 312 rate cuts over 24 months, spurring renewed interest in risk assets like Bitcoin and gold, according to a Coinotag report. The crypto M&A boom in Q3 2025, reaching $10 billion, further underscored a shift toward alternative stores of value as investors navigated low-rate environments.

Despite concerns about gold's recent pullback from record highs, Street remains optimistic, calling the dip "a healthy correction" in an asset with "strong fundamental drivers." The WGC expects investment demand to remain resilient, with central bank purchases and ETF inflows poised to outpace declines in jewelry and industrial sectors.

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