Gold demand hits record high on Trump policy doubts: industry

Gold demand surged to a record high in 2025 as investors and central banks flocked to the safe-haven asset as protection against US President Donald Trump's unpredictable policies and their potential economic impact, industry data showed Thursday.

The price of gold has surged in response, pushing on with a meteoric rise this year that saw it near $5,600 a troy ounce (31.1 grams) on Thursday. 

Purchases hit all-time highs in both volume and value last year, the World Gold Council said in its annual report, with demand exceeding 5,000 tonnes and value reaching $555 billion -- a 45 percent increase year on year. 

"Uncertainty" has been the key driver of gold's strong performance, said WGC analyst Krishan Gopaul.

"On a geopolitical front, there were obviously concerns about the actions of the new Trump administration," he said.

The year was marked by Trump's tariff onslaught against major trading partners including China, the European Union and India, upending longstanding global free trade tenets. 

Adding to that, Trump's criticism of US monetary policy has fuelled concerns about the Federal Reserve's independence and contributed to a weakening dollar.

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Those fears have led other central banks to significantly increase their gold reserves.

Although central bank purchases of gold fell slightly in volume from the previous year, their total value increased by 13 percent in 2025.

Gold now makes up more than 20 percent of central bank reserves, a level not seen since the early 1990s, the WGC said.

Demand was also boosted by enthusiasm for exchange-traded funds linked to the gold price.

"Gold ETFs have made gold more accessible to many investors" by making it as easy to buy as a company stock, Gopaul said.

A fresh surge in gold's price this week was driven by "safe-haven demand, geopolitical tensions and... as investors shift to hard assets from traditional currencies and bonds", Liam Fitzpatrick, head of metals and mining research at Deutsche Bank, said Thursday.

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