Where is gold headed? 5 top insights for Gold investors from WGC

The market is being driven by strong investment inflows, ongoing geopolitical concerns, and shifting central bank strategies, despite declining demand in traditional consumer sectors like jewellery.

Investment demand is surging

The stellar gold price rise during Q3 was largely the result of an acceleration in investment demand across all formats: bars, coins and gold ETFs.

Record inflows into gold ETFs and bar/coin purchases are being fuelled by geopolitical worries and strategic portfolio decisions. It is expected that momentum will continue.

"Q3 was a record quarter for gold-backed ETFs. Global inflows reached US$26bn, eclipsing the previous quarterly record of US$24bn set in Q2 2020. In volume terms, Q3 demand of 222t took total holdings to 3,838t, just 2% shy of the 3,929t peak from November 2020. Demand for gold ETFs has been a key contributor to gold’s price performance so far in 2025 and Q3 was no exception," it added

“Bar and coin demand has been stalwart this year despite the price rally… a little further upside potential, given a positive outlook for China and India,” the report added.

Jewellery demand remains under pressure

“High prices are likely to remain the biggest obstacle to jewellery demand volumes… Our ‘no growth’ technology estimate remains in place, torn between thrifting and AI investment,” WGC noted.

"Gold jewellery consumption is 18% lower y-t-d at 1,095t, although so far it remains comfortably above the 2020 low of 894t. The value of gold jewellery bought globally y-t-d has reached US$112bn, a record for our data series and 14% above the US$99bn from 2024," said WGC.

Central Bank buying shows no signs of slowing

Despite record prices, central banks, especially in emerging markets, continue to buy gold in large volumes, diversifying reserves and supporting the market.

“Our 2025 central bank survey showed the strongest intention to continue buying since it was initiated in 2019,” said WGC in its report. “We are encouraged by demand resilience in Q3 in the face of rapid price rises,” it added.

Supply and recycling trends remain tight

High gold prices are encouraging mine production, but recycling (scrap supply) remains muted. Consumers are holding gold, often for collateral, limiting secondary supply.

“Recycling continues to undershoot expectations… Expectations of yet higher prices, lack of economic distress, lack of ready supplies and a preference to use gold for collateralisation are likely culprits,” WGC said.

Macro trends boost gold’s appeal

Gold remains a hedge amid US dollar fluctuations, potential rate cuts, and inflation concerns. Slower growth combined with higher inflation, a stagflation environment, is historically supportive for gold.

“A weaker dollar during the first nine months of 2025 is largely pinned on hedging activity… Anticipated US policy rate cuts are another key pillar for investors… The by-now familiar theme of stagflation is historically supportive of gold,” the council noted in its report.