Total gold demand reached its highest first-quarter level in nine years, driven by increased investment demand and bar and coin purchases.
Gold ETFs saw a surge in investment, while gold-backed cryptocurrencies experienced a resurgence with a 77% increase in monthly transfer volume.
Despite reaching a record average quarterly price, gold experienced a slight dip in the past week.
The gold market is seeing a shift in activity, with central bank buying slowing and demand from exchange-traded funds and gold-backed cryptocurrencies growing. The latter recently moved to a three-year high, as measured by the net minting volume for tokens backed by the precious metal.
Over $80 million worth of these tokens were minted over the past month, according to data from rwa.xyz. That boost helped push the sector’s market cap up 6% to $1.43 billion. Meanwhile, monthly transfer volume rose 77% to $1.27 billion, marking a sharp resurgence of interest in digital representations of the precious metal.
The World Gold Council’s latest report shows that total gold demand in the first quarter of the year reached 1,206 tonnes—a 1% year-over-year increase and the strongest first quarter since 2016. The surge came despite a slowdown in central bank purchases, which fell to 244 tonnes, down from 365 tonnes in the fourth quarter.
Gold ETFs played a central role in the shift. Investment demand has more than doubled to 552 tonnes, suggesting investors are moving into the precious metal, a move central banks are known for historically.
Those inflows helped push the average quarterly price of gold to a record $2,860 per ounce, up 38% from the previous year. Yet the price dipped 2.35% last week, after rising 23.5% year-to-date, while risk assets, including cryptocurrencies, rose. Spot gold is currently trading at $3,240.
While traditional gold demand, such as jewelry, saw a downturn—dropping to pandemic-era lows—bar and coin demand stayed elevated, especially in China.
