LONDON: Global gold demand including over-the-counter (OTC) trading rose by 1% year-on-year to 1,206 metric tons in the first quarter of 2025 as investment jumped 170%, the World Gold Council said on Wednesday.

Spot gold prices are up 26% so far this year and have hit multiple record highs as first-quarter investment demand hit the highest since the first quarter of 2022, when global markets were grappling with the immediate consequences of Russia's invasion of Ukraine.

"It's been a bumpy start to the year for global markets as trade turmoil, unpredictable U.S. policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors," the WGC's senior markets analyst Louise Street said.

Driving up investment demand were massive inflows into physically backed gold exchange-traded funds and 14% growth in demand for gold bars in the first quarter. That offset a 32% slump in demand for coins.

However, bar and coin investment in China rose 12% to 124.2 tons, the highest level since the second quarter of 2013's record high, said the WGC, an industry body whose members are global gold miners.

Amid high prices, global gold jewellery consumption, the key category of physical demand, fell 21% to 380.3 tons, the lowest level since the 2020 pandemic. Central banks, another major source of gold demand, cut purchases by 21% to 243.7 tons in the first quarter, the WGC calculated, based on reported purchases and an estimate of unreported buying.

"While this level of demand was 21% lower year-on-year, it remains robust and in line with the quarterly average for the last three years of sustained, strong buying," it added.

For the full year, the WGC expects gold investment to continue gathering pace and central banks to repeat buying close to the range seen over the past three years due to elevated trade-related risks.

Gold supply and demand by WGC*: Q1'24 Q4'24 Q1'25 Q1'25 change y/y (%) Supply Mine production 853.4 957.1 855.7 0 Net producer hedging -8.8 -19.3 5.0 - Recycled gold 349.6 358.7 345.3 -1 Total supply 1,194.2 1,296.6 1,206.0 1 Demand Jewellery fabrication: 538.5 520.4 434.0 -19 - Jewellery consumption 480.1 547.5 380.3 -21 - Jewellery inventory 58.4 -27.1 53.6 -8 Technology: 80.2 82.9 80.5 0 - Electronics 66.0 68.8 67.0 2 - Other industrial 11.9 11.9 11.3 -5 - Dentistry 2.3 2.2 2.1 -6 Investment: 204.4 344.7 551.9 170 - Total bar and coin: 317.3 326.0 325.4 3 of which bars 226.8 236.6 257.6 14 of which official coins 66.0 53.5 45.2 -32 of which medals 24.6 35.8 22.6 -8 - ETFs/similar products -113.0 18.7 226.5 - Central banks, other inst. 309.9 365.1 243.7 -21 Gold demand 1,133.0 1,313.0 1,310.0 16 OTC and other 61.2 -16.5 -104.0 - Total demand 1,194.2 1,296.6 1,206.0 1 LBMA gold price ($/oz) 2,069.8 2,663.4 2,859.6 38 *Source: Metals Focus, ICE Benchmark Administration, World Gold Council.

(Reporting by Polina Devitt; Editing by Jan Harvey)