Gold staged an impressive rally this year, driven mainly by a resurgence in exchange-traded fund (ETF) demand alongside steady central bank buying.
As Deutsche Bank puts it, the two have emerged as “aggressor” buyers in the market, shaping price momentum beyond traditional drivers.
According to Deutsche analyst Michael Hsueh, ETF demand is exerting “a 50% stronger influence on gold prices” this year compared to when investors were reducing holdings between 2021 and 2024.
Central banks, meanwhile, continue to add 400 - 500 tonnes of gold annually, a trend the bank describes as largely price-insensitive. This official demand has seen a step higher since 2021, even at elevated real prices.
By contrast, jewellery demand retains its historical price elasticity and tends to contract when prices rise.
Hsueh notes that increases in jewellery consumption are more likely to occur when gold is cheaper, meaning that declines in this segment are not necessarily bearish for the market. Bar and coin demand is also generally price-insensitive, though outlier years can show fluctuations.
On the supply side, recycled gold typically acts as a brake on price moves, with higher prices encouraging more scrap supply. However, in 2025, recycled flows have undershot expectations, Investing.com notes.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
