Worldwide appetite for gold continues its strong trajectory, demonstrating the precious metal’s enduring appeal as a critical safe haven asset amidst a volatile global economic landscape.
The first half of the year witnessed a remarkable surge in gold’s value, with the commodity recording a significant 26 percent gain against the dollar, outperforming nearly all other major asset classes. This robust performance underscores gold’s inherent stability and its role in wealth preservation strategies during periods of market turbulence.
According to the World Gold Council’s latest analysis, the sustained demand for gold investment is largely attributed to ongoing market uncertainties. Factors such as evolving trade tensions, unpredictable shifts in global policy, and frequent geopolitical flashpoints have propelled investors and central banks to persistently accumulate this vital commodity.
Louise Street, a senior markets analyst at the World Gold Council, emphasized the remarkable investment activity seen in the first half of 2025. Total investment during this period exceeded 1,000 tonnes, a magnitude not witnessed since 2020, highlighting gold’s crucial function as a hedge against inflation and broader geopolitical risks for global portfolios.
Retail demand also saw substantial growth, with overall bar and coin purchases climbing 11 percent year-on-year, marking the strongest first half since 2013. Europe, particularly, registered robust expansion, doubling its gold investment compared to the previous year. Concurrently, gold-backed exchange-traded funds (ETFs) experienced sustained demand, with global holdings rising by 397 tonnes, signifying a continued interest in accessible gold investment vehicles.
While the first half was exceptional, Street noted the potential for gold to trade within a relatively narrow range in the latter half of 2025. However, the prevailing unpredictable macroeconomic environment could still underpin further gains, suggesting that any material deterioration in global economic or geopolitical conditions would likely amplify gold’s safe-haven appeal, potentially driving prices even higher.
A significant driver of increased interest, particularly in the UK, has been gold’s unique tax advantages. Gold remains exempt from VAT, and importantly, gold bullion coins minted by the Royal Mint are free from capital gains tax, making them an attractive, tax efficient alternative for investors facing mounting tax pressures. This aspect of gold investment is increasingly drawing attention from those seeking wealth preservation.
Analyst predictions mirror this sentiment, with the London Bullion Market Association lifting their forecasts for gold’s average price. Paul Williams, managing director of Solomon Global, highlighted that investors are not merely seeking diversification or historical appeal, but are actively pursuing gold as a smart, tax-efficient option as the UK tax burden is projected to reach new highs as a proportion of GDP, further enhancing its appeal as a wealth preservation tool.
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