Commodities Buzz: Global gold demand gains 1% on year in March quarter, ETF inflows spike while jewellery volumes moderate

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.

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