Despite short-term volatility, traders have maintained their positive outlook for both the demand and price of gold for the remainder of the year as investors and central banks continue to accumulate bullion amid lingering economic and geopolitical uncertainties, according to YLG Bullion International.
Pawan Nawawattanasub, chief executive of YLG Group, said gold prices declined by 16% from an all-time high of US$5,595 per ounce on Jan 29, while demand remained strong, driven by purchases of gold bars and coins for investment and accumulation by central banks worldwide.
Data from the World Gold Council showed global gold demand in the first quarter climbed to 1,231 tonnes with a combined value of $193 billion, up 74% year-on-year and marking the highest quarterly level on record.
Retail investment demand for gold bars and coins jumped 42% year-on-year to 474 tonnes, representing the second-highest level in history. Meanwhile, global central banks recorded net purchases of 244 tonnes during the quarter, up 3% from a year earlier and extending net buying for a 17th consecutive month, despite gold prices rising more than 80% on annualised basis.
China remained the key engine of global gold demand. Chinese investors purchased 207 tonnes of gold bars and coins during the quarter, up 67% from a year earlier and setting a new quarterly record, surpassing the previous high of 155 tonnes recorded in 2013. India, South Korea and Japan also significantly increased allocations to gold investments.
One of the most notable trends this year has been the divergence between Asian and Western investor behaviour, said Mrs Pawan, noting Asian investors continued to accumulate physical gold even as US-based investors reduced holdings in gold exchange-traded funds in March, with outflows exceeding total inflows from January and February combined.
"This reflects a structural turning point in the global gold market," she said. "Western investors remain focused on the opportunity cost of holding gold versus elevated US Treasury yields, while Asian investors continue to view gold as a safe-haven asset and a long-term store of value that helps diversify currency and financial market risks."
This perspective has been deeply embedded in Asian investment culture for centuries and "is less sensitive to interest rate cycles", said Mrs Pawan, adding major global financial institutions remain bullish on gold's long-term prospects.
Goldman Sachs predicts gold prices could hit $5,400 per ounce this year, while JPMorgan Chase and BNP Paribas estimate a range of $6,250-6,300, up from the current trading range of $4,700-4,800 an ounce.
Deutsche Bank projects gold could climb to $8,000 an ounce in five years, supported by ongoing de-dollarisation trends and continued reserve diversification by central banks.
The latest market data suggests buying momentum is not merely speculative, but reflects a structural accumulation trend by both central banks and Asian investors, said Mrs Pawan.
"Demand for bars and coins continues to indicate a broader shift away from reliance on the US dollar amid global economic and geopolitical uncertainty," she said. "Even if geopolitical tensions ease or the Federal Reserve begins cutting interest rates, there are still no signs that central bank or Asian investment demand is slowing."
Fresh data from the People's Bank of China revealed it added 260,000 ounces, roughly 8.1 tonnes, of gold reserves in April after prices retreated. The purchase volume was 8.7 times higher than the average monthly buying pace recorded between October 2025 and February this year, extending the country's gold reserve accumulation streak to 18 consecutive months.
