Investors rely on gold: Demand in the first quarter of 2025 at multi -year high

• Strongest annual start for gold since 2016
• Central banks and investors buy massive
• Inflation, debts & uncertainty drive demand

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The global gold demand increased significantly in the first quarter of 2025 and marked the strongest start of the year since 2016. According to the current report of the World Gold Council (WGC), a total of 1,206 tons of gold were asked, including OTC transactions and storage flows.

Central banks on a gold course: Demand remains unbroken

Joseph Cavatoni, Senior Market Strategist at WGC, sees the continued gold demand a clear sign of geopolitical and economic faults. “Central banks are still at the table, and we do not expect that this will decrease to a greater extent in the course of 2025,” said Cavatoni in an interview with Kitco News. The main drivers of this development are inflation concerns, the growing geopolitical fragmentation and the trend towards dedollarization.

According to Cavatoni, the central banks are particularly active in emerging countries, which on average keep less than 15 percent of their reserves in gold – compared to around 75 to 80 percent in industrialized nations such as the USA. This offers “definitely space for growth,” says Cavatoni.

Investors rely on gold again: ETF inflows attract

A clear mood change can also be seen on the investor side. “Investors – and global investors – are again involved when it comes to adding gold to their portfolios,” emphasized Cavatoni according to Kitco News. In the first quarter, there were strong tributaries in Exchange Traded Funds (ETFs), especially in April, when China recorded record inflows – more than in all of North America throughout the first quarter.

The return of investors have structural reasons: “It is time to rethink the portfolio layout. People recognize that they need diversification because the correlations between bonds and stocks are more high than ever,” said the WGC expert in the interview. Gold benefits from this as a crisis -resistant asset.

Trust in the dollar crumbles: risk protection in volatile markets

Another central factor is increasing uncertainty on the capital markets. The high debt stalls in the USA, recently tightened by the downgrading of creditworthiness through Moody’s, ensure that “dollar assets and the dollar itself are under pressure and actually only create more risks on the horizon,” warned Cavatoni in an interview with Kitco News.

Against this background, it also shows that investors think long -term: “What we see from the rivers is a lot of activity from the more stable investors – they increase their stocks and stick to them,” said Cavatoni. That strengthens trust in the sustainability of the trend.

Gold remains in demand: expert sees enormous potential

According to Cavatoni, the fundamental dates clearly speak for further growth. He considers price goals of up to $ 4,000 per personalist to be realistic. In addition, new legislation in the USA could also inspire the gold market: a draft law to remove regulatory hurdles for investment funds to keep gold is on the way to legislation. “This is actually quite exciting,” says Cavatoni, who recognizes growing political attention in the topic. In the first quarter of 2025, the sudden increased gold demand underlines the growing importance of the precious metal as a safe harbor in a crisingly global environment.

Editor finance.net

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