Investing.com -- Global gold demand reached 1,206 tonnes in the first quarter of 2025, the highest Q1 total since 2016, as rising exchange-traded fund (ETF) inflows and persistent macro uncertainty lifted investor appetite, according to the World Gold Council (WGC).

The total demand rose 1% year-over-year (YoY), with investment demand being the key driver. Total gold investment more than doubled to 552 tonnes, a 170% year-on-year surge, as ETFs recorded a sharp revival after a subdued 2024.

This marked the highest quarterly investment demand since the first quarter of 2022.

Bar and coin demand also held firm at 325 tonnes, 15% above the five-year average. “China drove much of this increase, posting its second-highest quarter of retail investment,” the WGC said in a report.

Central banks added 244 tonnes to their reserves in the quarter. While this was a slowdown from the final quarter of 2024, it remained within the typical range seen over the past three years.

Meanwhile, jewellery consumption slumped to its lowest level since the COVID-impacted first quarter of 2020, as record prices deterred buyers. However, in value terms, spending rose 9% YoY to $35 billion.

Technology demand was flat at 80 tonnes.

“Ongoing AI adoption drove continued growth in the electronics sector, but uncertainty over tariffs makes for a challenging environment for the remainder of the year,” the report added.

Gold prices hit multiple all-time highs during the quarter. The average LBMA gold price reached $2,860 per ounce, up 38% from a year earlier. Key tailwinds included fears over U.S. tariffs, heightened geopolitical risks, equity market volatility, and a weaker dollar.

On the supply side, total gold availability also stood at 1,206 tonnes, rising 1% from a year earlier.

Mine production climbed to a Q1 record of 856 tonnes, while gold recycling fell 1% as holders awaited potentially higher prices.

OTC investment and stock changes were negative, suggesting a shift in investor preference toward ETFs