25% Surge in Demand for Gold Bullions and Coins in UAE

Hossam Abdelnabi - Abu Dhabi

The World Gold Council report revealed an increase in the demand for gold bars and coins in the UAE during the second quarter of this year by 25% compared to the second quarter of the previous year. The demand reached 4.1 tons in Q2 2025, compared to 3.3 tons in Q2 2024.

The report confirmed a 31% rise in the demand for gold bars and coins in the UAE during the second quarter of this year compared to the first quarter. The volume rose to 4.1 tons in Q2 2025, compared to 3.1 tons in Q1 2025.

The report noted a decline in the demand for gold jewelry in the UAE during the second quarter, with a 16% annual basis drop to 7.7 tons compared to approximately 9.2 tons in Q2 of 2024. It also pointed out a 2% drop from 7.9 tons in the first quarter to 7.7 tons in the second quarter of the same year.

The World Gold Council highlighted a 3% annual increase in total gold demand in Q2, including off-exchange investments, reaching 1249 tons. The surge was supported by investment inflows, boosting gold demand with a 78% rise in investment demand.

(The Gold Demand Trends - Q2 2025 report) stated that the total gold demand in terms of value rose by 45% on an annual basis to reach 132 billion dollars. It explained that investor flows once again drove growth, fueled by safe haven motives and the benchmark gold price, although central bank purchases continued at a slightly slower pace than recent years.

The report revealed that central banks added 166.5 tons of gold to their official reserves in Q2, a third less than the first three months, leading to the lowest first-half-year purchases since 2022. It also showed a 14% decrease in global gold jewelry consumption, reaching 341 tons, the lowest level since Q3 2020.

The report pointed out that Gold-backed ETFs continued rapidly in Q2, as a mix of ongoing uncertainty regarding global trade policy, geopolitical tensions, and rising gold prices bolstered global demand for these funds.

Demand for gold bars and coins exhibited strong annual growth, with safe haven motives and peak gold prices attracting investors. This resulted in the strongest demand for gold bars and coins in the first half of the year since 2013, noted by rising gold prices continuing to affect the ability to purchase gold jewelry, leading most markets to experience a yearly decline in jewelry demand volumes despite sharp increases in demand values.

According to the World Gold Council, the total gold supply rose by 3%, with modest growth in both mine production and recycling. However, recycling volumes remain less affected by peak gold prices than expected.

Regarding 2025 projections, the report expected investment demand for gold ETFs, bars, and coins to remain high, albeit at a slower rate in the second half. Though central bank purchases slowed down, they remain strong, and the long-standing trajectory of increasing their holdings continues. High gold price environments continue to hamper gold jewelry sales, although recycling remains limited.

The report recorded a new record high for gold prices in the London bullion market during June, with a quarterly average of 3280.35 dollars per ounce, marking a 40% annual increase and a 15% quarterly increase.

Early estimates of mine production indicate a record level in Q2, reaching 909 tons, despite recycling activity remaining weak amid high prices. Indian consumers increasingly moved to exchange old jewelry for new or pawn it as loan collateral. Off-exchange investments and stocks added 170 tons to the demand in Q2, suggesting that institutional investment is likely to stay strong, with global high-net-worth investors' interest persisting.