Asian Markets Drive Global Gold Demand to Record Highs
Physical gold demand across Asia has surged in 2025, with a notable shift from jewelry to investment products as record-high gold prices reshape consumer behavior. According to World Gold Council data, retail bar and coin investment accounted for nearly half (48.4%) of total household gold purchases across China and India during the first half of 2025.
China and India together account for more than 50% of global gold demand, making them the most critical consumer markets worldwide. Investment demand has generated a significant share of total gold demand this year, with bar, coin, and gold ETF demand accounting for over half of total demand in 2025, up from less than one-third last year.
China: Record Shift to Investment Products
China's gold investment market has seen unprecedented strength. In the second quarter, investment products topped 60% of household gold purchases—a series record on available data. Chinese bar and coin demand grew by 44% year-over-year in the first half of 2025, with Chinese investors snapping up 115 tonnes of gold bars and coins in the second quarter alone.
The surge in gold prices has crushed jewelry sales, but coincided with a marked rise in retail bullion bar and coin demand. Chinese consumers are increasingly viewing gold as a safe-haven investment amid economic uncertainty and property market volatility.
India Emerges as Brightest Spot
India was the standout performer in Q3 2025, accounting for 91.6 metric tons of gold bar and coin purchases with a record value of more than $10 billion. Remarkably, India's appetite for gold bars and coins surpassed even China, which reported 73.7 metric tons in the same period.
Gold demand in India is showing signs of a strong pickup with the onset of the festive season, led primarily by a surge in physical investment demand for bars and coins. Investment interest is reportedly outpacing jewelry purchases, reflecting a fundamental shift in how Indian households approach gold ownership.
Jewelry Demand Declines as Prices Soar
While investment demand surges, jewelry purchases have declined significantly. By weight, China and India's jewelry purchases sank by a quarter (25.0%) between January and June compared with the first six months of 2024, setting the smallest half-year total on recent records outside of the COVID lockdowns.
A 17% dip in jewelry demand in India and a 20% drop in China drove the overall jewelry market lower. The shift represents a reallocation rather than reduced gold appetite—consumers are choosing investment products over jewelry as prices climb.
Why This Matters for Investors
The sustained Asian physical demand represents a fundamental support level for gold prices. The shift from jewelry to investment products indicates growing sophistication among Asian gold buyers, who increasingly view gold as a financial asset rather than simply an adornment.
For portfolio managers, this trend indicates potential for continued gold price support, particularly as Asian investors prioritize physical ownership over paper gold instruments. The strong physical demand creates a floor for prices even during periods of Western market volatility.
Sources: World Gold Council, BullionVault, Money Metals, Investing News