Global Risks To Support Gold Demand In 2025: Industry

London: Geopolitical and economic uncertainty will support investment demand for Gold in 2025 but jewellery purchases will stay weak owing to record high prices, an industry body predicted Wednesday.

Global demand for gold hit an all-time high last year at nearly 5,000 tonnes as the precious metal struck record high prices on the London Metal Exchange -- and has continued to do so at the start of 2025.

However, "high prices dampened demand in the jewellery sector", with consumption down 11 percent to 1,877 tonnes, the World gold Council said in its latest annual report.

"The decline was driven largely by weakness in China, down 24 percent year-on-year, though Indian demand remained resilient, dropping just two percent in 2024," the WGC added.

China's economy came under severe pressure last year, ceding its position as the world's biggest consumer of gold jewellery to India, whose demand was supported by reduced import tax on the commodity.

gold traded at a fresh pinnacle of $2,877 an ounce on Wednesday as investors rushed to the metal seen as a haven investment in times of economic unrest.

"The precious metal is finding support amid dollar weakness and growing apprehension over the escalating trade war between the US and China, as well as its likely negative impact on global economic growth prospects," noted Ricardo Evangelista, analyst at ActivTrades.

It comes after gold struck 40 record highs last year as global demand reached a record high of 4,974 tonnes, driven by central bank purchases, said the WGC.

Its senior markets analyst Louise Street forecast that central banks would again lead demand in 2025.

"Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk."

However, "jewellery weakness will likely continue as high gold prices and soft economic growth squeeze consumer spending power", Street added.

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