Gold bars and coins hit 12-year high as bullion demand crosses 5,000 tonnes

Tense geopolitics look set to be a major contributor to gold's fortunes again in 2026, supporting a continuation of elevated central bank demand, strong gold ETF inflows,robust bar and coin demand.

Gold’s performance in 2025 was not just strong—it was historic.

 

According to the World Gold Council (WGC), total gold demand crossed 5,000 tonnes for the first time, while the value of global demand surged to a record $555 billion, up 45% year-on-year, as both volumes and prices scaled new highs.

 

The LBMA gold price set 53 new all-time highs during the year, with the annual average price rising 44% to $3,431 per ounce.

 

The data offers two key insights: why gold attracted such sustained interest in 2025—and whether those forces are likely to persist in 2026.

 

Investment Demand Took Centre Stage

 

 

The defining feature of gold’s 2025 rally was the scale and breadth of investment demand. 

Total annual gold supply grew by 1%.

 

Global gold ETFs recorded net inflows of 801 tonnes, making it the second-strongest year on record for ETF accumulation. Bar and coin demand also accelerated sharply, reaching a 12-year high, as investors sought direct exposure amid heightened macro uncertainty.

 

Safe-haven demand, diversification needs, and price momentum worked in tandem. Concerns around global growth, geopolitical tensions, elevated public debt levels, and expectations of persistently low or negative real interest rates kept gold firmly in focus throughout the year.

 

This combination pushed investment demand up 84% year-on-year to 2,175 tonnes, accounting for nearly half of total gold demand in 2025 

 

Central Banks Remain a Structural Pillar

 

Central bank buying continued to provide a powerful underpinning to gold demand.

 

Official sector purchases totalled 863 tonnes in 2025, placing them at the upper end of WGC’s expectations. While this marked a slowdown from the extraordinary pace seen in the previous two years, buying remained historically elevated and geographically broad-based.

 

For long-term investors, this matters because central banks tend to operate on strategic, multi-year horizons. Their continued accumulation reinforces gold’s role as a reserve asset of choice in an environment of currency diversification and geopolitical realignment.

 

Jewellery Volumes Fell—but Value Told a Different Story

 

As expected in a year of record prices, jewellery demand volumes declined sharply, falling 18% year-on-year to 1,542 tonnes. However, this did not reflect a collapse in consumer sentiment.

 

In value terms, global jewellery demand rose 18% to a record $172 billion, indicating that consumers continued to view gold jewellery as a store of value, even if volumes moderated. This dynamic was particularly visible in price-sensitive markets, where consumers adjusted weights rather than exiting the category altogether.

 

Supply Responded—But Only Marginally

 

On the supply side, gold production showed limited responsiveness to higher prices.

 

Total gold supply rose just 1% to 5,002 tonnes in 2025. Mine production edged up to a record 3,672 tonnes, while recycling increased by a modest 3%, despite a 67% rise in the US dollar gold price.

 

This muted supply response underscores a key structural feature of the gold market: supply is relatively inelastic, making prices more sensitive to shifts in demand.

 

Technology Demand Holds Steady

 

Gold’s industrial and technology demand remained stable at 323 tonnes, supported by continued growth in AI-related applications, even as parts of the consumer electronics sector faced disruption.

 

While technology accounts for a smaller share of total demand compared to investment or jewellery, its stability adds another layer of resilience to the overall demand profile.

 

What the Outlook Looks Like for 2026

 

Looking ahead, the World Gold Council expects many of 2025’s drivers to remain in place.

 

The outlook points to:

• Another year of strong ETF inflows, supported by ongoing geopolitical tensions
• Robust bar and coin demand, as investors continue to prioritise portfolio diversification
• Sustained, though possibly moderating, central bank buying
• Weak jewellery volumes, if prices remain elevated

 

In short, the WGC does not see a sharp reversal in gold’s fundamentals, even if price volatility increases after such a strong run.