Global gold consumption is undergoing a notable transformation, with investment-led demand increasingly shaping the market dynamics even as prices remain elevated.
According to CareEdge Ratings, global gold demand reached a record 5,000 metric tonnes in CY25, up 8% year on year. This rise was driven by strong investment demand, which hit a record 2,175 MT, exceeding the previous peak of 1,805 MT in CY20.
A key driver was exchange-traded funds, with global ETF holdings increasing by 801 MT, the second-highest addition on record. ETF investments contributed over 800 MT, while bar and coin demand also surged to a 12-year high.
Consumption patterns shifted notably, with ETFs accounting for 16% of total gold demand in CY25 compared to no measurable share in CY24, indicating a structural shift driven by safe-haven demand, diversification and geopolitical uncertainty.
As investment demand increased, jewellery consumption declined in share. Globally, jewellery made up 33% of gold demand in CY25, down nearly 19% year on year and well below its 15-year average of ~50%.
In India, jewellery’s share fell below 60% of total gold purchases versus a long-term average of ~70%, mainly due to high gold prices reducing discretionary buying.
However, in value terms, the Indian jewellery market remained resilient. Spending rose 10% year on year to ₹4.8 lakh crore in CY25, with a CAGR of 11% from CY21 to CY25. In contrast, volumes dropped 15%, indicating a shift toward lighter-weight and lower-carat products.
As per the report, India’s gold consumption is shifting toward investment, with investment demand rising to 42% in CY25 from 29% in CY24. ETF investments reached 37.5 tonnes in CY25, exceeding the combined total of the previous 10 years.
Growth is expected to moderate to 20–25% in FY27, while operating margins may expand by 180–200 basis points in FY26 due to inventory gains and stabilise at 6.5–7% in FY27.
Central banks have continued to accumulate gold for the fourth consecutive year, reinforcing its role as a reserve diversification tool amid geopolitical tensions.
The broader macroeconomic environment, combined with sustained official sector buying, has pushed gold prices into what analysts describe as a more durable high-price phase, supported by structural demand rather than short-term speculative activity.
Globally, elevated geopolitical risks, including ongoing conflicts, have strengthened gold’s appeal as a safe-haven asset, contributing to rising demand across markets such as Europe and the United States.
Read More: BlackRock Plans to Launch Active India ETF to Compete with JP Morgan!
The gold market is witnessing a clear transition from traditional jewellery-driven demand to investment-led consumption. With ETFs and other investment avenues gaining prominence and prices remaining elevated, this structural shift is expected to continue shaping the global and Indian gold landscape.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Funds Investments are subject to market risks, read all the related documents carefully before investing.
Published on: Apr 28, 2026, 11:20 AM IST
Team Angel One
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