London: Global gold demand increased by 3% annually in the second quarter of the year, reaching a record value of $132 billion, according to a report by the World Gold Council (WGC).

According to Anadolu Agency, the demand amounted to 1,249 tons during the second quarter of 2025. Strong investment flows, coupled with rising geopolitical uncertainty and price momentum, led to a 45% year-over-year increase in the US dollar value of global gold demand in this period, setting a record at $132 billion.

Gold investments saw a 78% year-on-year growth during the same period, with inflows of 170 tons over the quarter. Asian-listed funds contributed significantly, accounting for 70 tons, matching US flows. Combined with record inflows in the first quarter, global gold exchange-traded fund (ETF) demand reached 397 tons, marking the highest first-half total since 2020, according to the WGC.

Gold exchange-traded funds remained the primary driver of total demand, while investments in bars and coins rose by 11% year-over-year. Chinese investors led with a 44% year-on-year increase to 115 tons, while Indian investors added 46 tons in the second quarter.

Central banks maintained their gold purchases at a slower pace in the second quarter, adding 166 tons. Despite the slowdown, purchases remained high due to ongoing economic and geopolitical uncertainties.

Louise Street, senior markets analyst at the WGC, stated that global markets faced a volatile start to the year with trade tensions, unpredictable US policy shifts, and frequent geopolitical flashpoints. The robust investment activity in the first half of 2025 highlights gold's role as a hedge against economic and geopolitical risks. Ongoing market volatility and gold's impressive price performance have drawn global capital, she noted.

Street emphasized that gold outperformed many major asset classes with a 26% increase in dollar terms in the first half of the year. Although gold might trade within a narrow range in the latter half of 2025, the unpredictable macroeconomic environment could underpin further gains for gold. Any significant deterioration in global economic or geopolitical conditions could enhance gold's safe-haven appeal, potentially driving prices higher, she added.