Gold at the Center of the New Monetary Order: Why 2025 Became a Breakthrough Year?

The year 2025 will likely be remembered as a turning point in the modern history of gold. Both in physical terms and in market value, global demand reached levels never seen before, reflecting a deep shift in how investors, households, institutions, and governments perceive risk, money, and long-term security. Total gold demand, including over-the-counter transactions, exceeded 5,000 tonnes for the first time, while the gold price set 53 new all-time highs over the course of the year. Combined, these dynamics pushed the total value of annual gold demand to an unprecedented 555 billion US dollars, a year-on-year increase of 45%. This was not a speculative spike driven by a single shock, but the outcome of multiple structural forces reinforcing one another across regions and market segments.

Investment demand was the dominant driver. Global holdings in gold exchange-traded funds expanded by 801 tonnes, making 2025 the second-strongest year on record for ETF inflows. At the same time, physical investment in bars and coins accelerated sharply, reaching its highest level in twelve years. These flows were underpinned by a consistent set of motivations: the search for safe-haven assets, portfolio diversification away from financial and political risk, and, increasingly, price-driven momentum as gold’s relentless rise attracted new participants. Rather than cooling demand, successive record highs validated gold’s role as a store of value in the eyes of many investors.

Bar and coin investment deserves particular attention. The fourth quarter of 2025 alone saw demand of 420 tonnes, the strongest quarterly result in more than a decade, with volumes jumping by almost one-third both year-on-year and quarter-on-quarter. On an annual basis, bar and coin demand reached its highest level since 2013, with a record value of 154 billion US dollars. Strikingly, more than half of that value came from just two countries: India and China. In both markets, the gold price itself was the dominant catalyst, overshadowing local factors and becoming the common thread that unified investor behavior across regions.

In India, investment demand surged to levels not seen in over a decade. Two consecutive quarters with demand above 90 tonnes marked the strongest run since 2013, while annual investment reached a record value of 32 billion US dollars. A depreciating rupee amplified the rise in local gold prices, intensifying momentum buying and reinforcing gold’s appeal as a hedge against currency weakness. Importantly, part of this demand came from consumers who would traditionally have purchased jewellery but instead shifted toward lower-margin bars and coins. This change highlights a subtle but important transformation: gold in India is increasingly treated not only as adornment or cultural wealth, but as a financial asset.

This investment mindset was further reinforced by explosive growth in gold ETFs and digital gold products. New ETF listings broadened access, while digital gold transactions nearly tripled in value over the year. Looking ahead, regulatory changes may provide additional support. The decision by India’s pension regulator to allow National Pension System funds to invest in gold and silver ETFs opens the door to sustained institutional participation, potentially anchoring demand well beyond short-term price cycles.

China experienced an even more dramatic structural shift. For the first time in available data, annual bar and coin investment surpassed jewellery consumption. Safe-haven demand remained strong throughout the year, fueled by global geopolitical tensions, trade frictions, and repeated signals of official gold buying by the People’s Bank of China. A value-added tax reform announced in November provided an additional boost in the fourth quarter, encouraging investment-minded consumers to redirect spending away from jewellery toward investment products. Regulatory changes allowing insurers to participate directly in the gold market further strengthened the institutional foundation of demand, suggesting that China’s gold investment story is evolving from episodic surges into a more permanent structural feature.

Across the Middle East, retail investment reached multi-year highs in volume and record highs in value, supported by regional instability and global uncertainty. Turkey stood out as a partial exception. While retail interest remained solid and local premiums stayed elevated, the total value of investment declined year-on-year. High inflation eroded purchasing power, and repeated price spikes encouraged profit-taking after the exceptionally strong investment years of 2023 and 2024. Even so, gold continued to play a central role in household wealth protection.

In the United States and Europe, the picture was more nuanced. Annual bar and coin volumes in the US were broadly flat, but investment value still rose to about 7 billion US dollars. Beneath the headline figures, the market was highly active, with strong two-way flows as new buying interest coexisted with profit-taking from long-time holders. Europe recorded four consecutive quarters of year-on-year growth in investment demand, bringing volumes close to 2023 levels and pushing values to their highest since 2022. Here again, price momentum combined with geopolitical concerns to sustain interest.

Elsewhere in Asia, investment demand surged across most ASEAN markets. Indonesia saw consistently elevated buying driven by a weak domestic economy, currency pressures, and safe-haven motives, prompting jewellery fabricators to prioritize bar production. Thailand recorded its strongest annual investment since 2018, with value reaching a twelve-year high, although part of the demand migrated toward online trading platforms rather than physical retail. Vietnam was the notable outlier, where supply constraints and extreme local premiums sharply curtailed investment volumes, forcing investors to seek alternative proxies such as high-purity rings.

Japan and South Korea added further momentum late in the year. In Japan, the breach of key psychological price levels triggered a wave of retail buying, even as profit-taking by older holders remained a defining feature. In South Korea, gold investment exploded in the fourth quarter, amplified by currency weakness and speculation that the central bank might add gold to its reserves. Annual investment value more than doubled to 3 billion US dollars.

Central banks remained a cornerstone of the gold market. Net official purchases reached 863 tonnes in 2025, below the extraordinary 1,000-tonne levels of the previous three years but still far above the long-term average. Buying was broad-based, with emerging market central banks playing a leading role. Institutions such as the National Bank of Poland, the National Bank of Kazakhstan, and the Central Bank of Brazil made substantial additions, while unreported purchases remained a significant and opaque component of total demand. Survey evidence suggests that this trend is far from over, with overwhelming expectations of further reserve accumulation in the coming years.

An important new dimension emerged from the private sector. The crypto company Tether accumulated roughly 140 tonnes of gold, positioning itself as one of the largest non-sovereign holders of bullion. Its strategy, explicitly likened by management to that of a central bank, reflects a broader convergence between distrust in government debt, concerns over currency debasement, and renewed interest in gold as a neutral reserve asset. While Tether alone did not drive the rally, its presence illustrates how gold’s appeal is expanding into new financial ecosystems.

Taken together, the events of 2025 suggest that gold has re-established itself not merely as a cyclical hedge, but as a strategic asset embedded in the global financial system. Record prices did not suppress demand; instead, they validated gold’s role in an era defined by geopolitical fragmentation, fiscal uncertainty, and shifting monetary norms. As 2026 unfolds, the foundations laid in 2025 point toward continued strength in gold demand, even if the pace and composition of buying evolve.