How Investment Demand Propelled Gold Prices in 2025–26
ETF inflows, bar and coin buying, and shifting central bank activity pushed gold to record highs in early 2026. A data-driven look at the investment surge behind the rally.
Gold’s rally through 2025 and into early 2026 was not driven by jewellery demand — it was powered by investors.
As global uncertainty intensified, investment demand surged to roughly 1,350 tonnes in 2025, helping push total gold demand beyond 5,000 tonnes and lifting prices to fresh highs in early 2026.
Key Findings#
- Investment demand: ~1,350 tonnes in 2025
- ETF inflows: Returned after prior-year outflows
- Bar & coin demand: Strengthened amid currency volatility
- Central bank buying: Moderated relative to peak years
- Gold prices: Reached record territory in early 2026
In 2025–26, investors — not consumers — became the marginal price setters in the gold market.
Why Investment Demand Matters#
Gold plays a dual role: commodity and monetary hedge.
During periods of:
- Elevated inflation
- Currency volatility
- Geopolitical tension
- Slowing growth
Capital rotates into gold as a safe-haven asset.
Unlike jewellery demand, which is price-sensitive, investment flows often accelerate as prices rise — reinforcing momentum.
ETF Inflows and Bar & Coin Demand#
Investment demand in 2025 rebounded sharply compared with previous years.
ETFs: A Structural Driver#
Exchange-traded funds saw renewed inflows in 2025 after earlier periods of net redemptions.
Key dynamics included:
- Rate-cut expectations
- Falling real yields
- Increased portfolio hedging
Large products in Asia and global markets reported significant inflows, reflecting institutional participation.
Bars and Coins: Retail Hedge#
Physical bar and coin demand strengthened as:
- Retail investors sought inflation protection
- Emerging market currencies weakened
- Wealth preservation strategies expanded
The combination of ETF and physical flows created a powerful two-channel investment surge.
Investment vs Prior Records#
The 2025 investment total of ~1,350 tonnes marked one of the strongest years in recent history.
Compared to earlier peaks:
- It exceeded 2023 by over 400 tonnes
- It reversed the softening trend seen in 2022–23
- It approached levels last seen during major global crises
This sharp acceleration made investment the fastest-growing segment of gold demand in 2025.
Central Banks: From Dominant Buyers to Stabilizers#
While central banks remained net buyers, official sector purchases moderated relative to the extreme highs of prior years.
In previous years, central bank buying was the dominant force. By 2025:
- Investment demand slightly surpassed official purchases
- Private capital flows regained influence
- Market pricing became more sensitive to ETF data
The shift from official to private demand increased short-term price volatility.
Gold Price Reaction: Early 2026 Highs#
As investment flows strengthened, gold prices climbed toward record territory in early 2026.
Price drivers included:
- Dollar fluctuations
- Thin liquidity in early-year trading sessions
- Momentum buying following ETF inflows
Historically, sharp increases in ETF holdings correlate with upward price momentum within weeks, reinforcing feedback loops in bullish cycles.
2025–26 Investment Snapshot#
| Metric | 2025–Early 2026 Trend |
|---|---|
| Investment Demand | ~1,350 tonnes |
| Central Bank Purchases | ~1,155 tonnes |
| ETF Flows | Net positive |
| Bar & Coin Demand | Strengthened |
| Gold Price Trend | Record highs in early 2026 |
Market Outlook: Will Investment Stay Strong?#
Investment demand in 2026 will hinge on three variables:
1. Interest Rate Trajectory#
- Lower real yields historically support gold
- Policy shifts could sustain ETF inflows
2. Geopolitical Risk#
- Ongoing tensions drive safe-haven positioning
- Portfolio diversification trends remain intact
3. Currency Movements#
- Dollar strength may create short-term pullbacks
- Emerging market volatility can fuel retail buying
If uncertainty persists and monetary conditions ease, investment demand could remain above 1,200 tonnes, sustaining price support.
Conclusion#
The 2025–26 gold rally underscores a structural truth: when investors re-enter the market at scale, prices respond quickly.
With investment demand surpassing central bank purchases and ETF inflows returning, gold’s early-2026 highs appear rooted in capital flows rather than temporary supply shocks.
Whether the rally extends further will depend less on jewellery demand — and more on how global portfolios are positioned in a volatile macro environment.