Will Gold prices increase in 2025? Here’s What the forecast data says...
- Kiran S N
- Aug 11
- 4 min read
The first half of 2025 has been anything but ordinary for gold.
Global gold demand held steady in volume terms at 1,249 tonnes in Q2, up 3% year-on-year, but in value it surged to a record-breaking US$132 billion. Prices averaged over US$3,280/oz, making this one of the strongest pricing environments on record. It begs the question every investor is asking: Should I buy gold now, or is the rally peaking?
But here’s the twist: for the first time in years, it wasn’t jewellery leading the way. It was investment demand and that shift tells us a lot about the market’s mood.
Looking ahead, the World Gold Council’s outlook suggests:
ETFs could continue to grow, albeit with near-term pullbacks possible.
Retail investment should stay firm in H2, especially in India.
Jewellery is likely to remain under pressure due to high prices.
Central banks may add more to reserves despite a Q2 slowdown.
Technology faces tariff-related headwinds but benefits from AI-driven electronics demand.
(detailed table for bullish and bearish scenarios at the end of the article)
Investments
Gold investment demand jumped 78% y/y in Q2 to 477 tonnes.That’s ETFs adding 170 tonnes, plus another 307 tonnes in bar and coin buying.
What’s behind the surge?
Global uncertainties - trade tensions, tariffs, and geopolitical risks have kept safe-haven demand alive.
A weaker US dollar in H1, which made gold cheaper in other currencies.
High stock–bond correlation, meaning bonds haven’t been doing their usual job as a portfolio diversifier, pushing allocators toward gold.
Continued interest from institutional and OTC markets, adding depth to the buying.
China was the standout, with retail investment climbing to 115 tonnes in Q2, a 44% jump as property markets sagged and equities struggled.
In India, it was the eighth consecutive quarter of growth in bar and coin demand, though buyers leaned towards smaller denominations as prices crossed ₹100,000 per 10 grams.
Jewellery
If investment was the star, jewellery was the underperformer. Global jewellery demand fell 14% y/y in Q2 to 341 tonnes, the weakest since the height of the pandemic.
China’s demand dropped 20%, India’s fell 17%, with high prices pushing consumers toward lighter, lower-carat designs. In India, we even saw gold-plated silver gaining ground as a more affordable option.
Interestingly, the value of jewellery sales still rose 21% y/y to US$36 billion, a sign that while volumes are down, high prices are keeping revenue up.
Technology
Technology demand for gold slipped 2% y/y to 79 tonnes in Q2. Tariff uncertainty between the US and China continued to weigh on electronics supply chains, though AI-driven demand for advanced chips and high-end servers provided a partial offset.
Electronics remain the biggest user of gold in tech, but weakness in LEDs and wireless components has held back overall growth.
Central Banks: Slower, But Still Committed
Central banks bought 166 tonnes in Q2 — down 33% from Q1, but still well above pre-2022 norms.
Poland, Azerbaijan, and Kazakhstan were notable buyers, while China’s official additions were more modest at 6 tonnes. Unreported buying a consistent theme in recent years remained significant at around 90 tonnes.
The latest survey from the World Gold Council shows 95% of central banks expect global gold reserves to rise in the year ahead. That’s as clear a signal as any that strategic accumulation is here to stay, even if the pace fluctuates.
Gold price forecast for 2025
Gold enters the second half of 2025 with a complex mix of tailwinds and headwinds.
Here’s what could drive it higher...or knock it back:
Driver | Bullish Scenario | Bearish Scenario |
US Dollar | Gradual USD weakening as Fed cuts, global growth stabilizes | USD rebound via short squeeze, US outperformance, ECB/BOJ dovish shift |
US Real Interest Rates | Falling real rates from Fed cuts + sticky inflation | Higher-for-longer rates + inflation cooling → real yields rise |
Equities / Risk Appetite | Equity pullback or correction shifts flows to gold | Equities rally on earnings & growth optimism or rate cuts → “risk-on” rotation |
Stock–Bond Correlation | High correlation → bonds fail as hedge → allocators turn to gold | Stock-bond correlation falls → bonds regain hedge status, gold less needed |
China Retail Demand | Stable prices + economic uncertainty → investment demand stays high | Prices spike or growth recovers strongly → rotation back to equities |
India Retail Demand | Equity valuations rich + festive demand season → sustained buying | Equity markets stay hot, rupee stable, gold demand softens |
ETF & OTC Investment Flows | Inflows accelerate from asset allocators and funds | Overcrowded longs unwind, outflows on price drops |
Geopolitics | Escalating tensions in trade, tariffs, or conflicts | Easing of tensions → safe-haven premium fades |
(Note: Gold rarely moves on just one factor. Inflation, yields, currency moves, risk appetite...they all push and pull at the same time. This table simplifies those forces into bullish and bearish cases for clarity, but in reality, the market blends them into one messy, moving picture.)
H1 showed us that gold can thrive even when jewellery demand falters as long as investment appetite is strong and central banks remain steady buyers. But with the dollar’s next move, Fed policy, and equity market behaviour all in play, the second half could be just as eventful.
For investors, the gold price forecast for 2025 isn’t a one-way bet...it’s a delicate balancing act between macro forces, market psychology, and shifting patterns in physical demand. The winners will be those who watch the signals closely, act decisively, and don’t mistake momentum for certainty.
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