LONDON (Reuters) – Central banks worldwide are on track to buy 1,000 metric tons of gold in 2025, which would be their fourth year of massive purchases as they diversify reserves from dollar-denominated assets into bullion, consultancy Metals Focus said.
Gold prices are up 29% so far this year after hitting a record high of $3,500 per troy ounce in April on geopolitical tensions and economic uncertainty as U.S. President Donald Trump continues to roll out his tariff policies.
The price rally has so far kept purchases by central banks, a crucial category of demand, unaffected with the first-quarter buying in line with the 2022-24 quarterly average, Metals Focus said in its annual report on Thursday.
“The drivers that have underpinned de-dollarisation in recent years remain firmly in place,” the consultancy said. “If anything, President Trump’s unpredictable policy stance, his public criticism of (Fed chair) Jerome Powell and the deteriorating U.S. fiscal outlook have further eroded confidence in the U.S. dollar and Treasuries as ultimate safe-haven assets.”
“Elevated geopolitical tensions since the start of his administration have also curtailed the appeal of U.S. assets.”
Accounting for almost one fourth of total demand, central banks are the third largest category of gold consumption after the jewellery sector and physical investment. In 2025, purchases from central banks are expected to fall by 8% from last year’s record high of 1,086 tons.
In January-March, Poland, Azerbaijan, and China – consistent buyers in recent years – led the officially reported buying, Metals Focus said, adding that steady inflows into Iran also suggest further purchases by the Central Bank of Iran.
Meanwhile, jewellery demand for bullion has been hit hard by the price rally. Gold jewellery fabrication fell 9% to 2,011 tons in 2024 and is expected to deliver a 16% slump this year with India and China accounting for much of this decline.
The consultancy expects average gold prices to rise by 35% this year after 23% growth in 2024, and reach $3,210 per ounce “with further strength likely into 2026”.
Following are Metals Focus’s gold supply and demand numbers, in metric tons:
2023 2024 2025F Change Change
24/23 25/24
SUPPLY
Mine production 3,640 3,661 3,694 1% 1%
Old scrap 1,234 1,368 1,368 11% 0%
Net hedging supply 69 – 25
Total supply 4,943 5,029 5,087 2% 1%
DEMAND
Jewellery fabrication 2,206 2,011 1,696 -9% -16%
Industrial demand 305 326 332 7% 2%
Net physical investment 1,207 1,191 1,218 -1% 2%
Net hedging demand – 55 –
Net central bank buying 1,051 1,086 1,000 3% -8%
Total demand 4,769 4,669 4,246 -2% -9%
Market balance 175 359 840 106% 134%
Net investment in ETPs -244 -7 500
Market balance less ETPs 419 366 340 -13% -7%
Gold price ($/oz) 1,941 2,386 3,210 23% 35%
(Reporting by Polina Devitt; editing by Mark Heinrich)
By Polina Devitt
