The World Gold Council anticipates mine output will remain strong for the remainder of the year, following higher demand in the first quarter of 2025, as gold surpassed $3,000 (R55,182) an ounce in a record price environment.
Speaking to Business Times, Krishan Gopaul, World Gold Council senior analyst for Europe, the Middle East and Africa, said higher output during the quarter highlighted healthy production despite rising input costs.
Gopaul was bullish about mining production, saying the overall economics of the gold mining industry were relatively healthy on the back of global trade tensions. “If you look at how costs have been increasing for mine production, the massive increase in the gold price has meant that margins have remained healthy, and that — combined with the announced development plans meant to be advanced this year — our expectation is that mine production will stay strong,” he said.
The World Gold Council’s latest gold demand trends report, released this week, showed a 1% increase year-on-year in demand to 1,206 tonnes in the first quarter.
Based on data in the report, Ghana, Chile and Canada had healthy production pipelines, but disruptions in Türkiye and Russia and cutbacks in Australia, were pointing to volatility in some areas.
I’m not sure anybody would have expected the gold price to have done what it did in the first quarter and break multiple records
— Krishan Gopaul, World Gold Council senior analyst for Europe, the Middle East and Africa
The report said gold’s investment haven status was further cemented during the quarter as gold exchange traded fund inflows climbed to 226t in the first quarter amid tariff policy uncertainty. Supply was 1% higher year-on-year at 1,206t in the first quarter of 2025, up from 1,194.20t a year earlier, driven by mine production of 856t, anall-time first quarter high since the launch of the data series, which dates back to 2000. It said this was despite a 1% year-on-year decline in recycling to 345t.
Gopaul said gold has rallied to $3,300 an ounce after several records so far this year, driving up demand for the precious metal from central banks and investors. Total demand in value terms is up 40% year-on-year. Central banks bought 244t of gold, which was lower than the previous quarter.
Central banks tend to be strategic buyers of gold. “It plays into gold strength as an asset not only for institutional retail investors but also for reserve managers, too,” said Gopaul.
“I’m not sure anybody would have expected the gold price to have done what it did in the first quarter and break multiple records. If you take the demand/supply fundamentals, the macro-economic demand, and the geopolitical picture into consideration — and the heightened level of uncertainty we’ve seen; and since the new US administration impacted a lot of the global trading system and the impact it has on growth expectations — you can see the backdrop is relatively positive to gold, it is playing to its strengths,” he added.
However, global jewellery consumption has fallen by 21% to 380t as demand is driven by affordability.
Gopaul said as the gold price went up, jewellery became more costly, as consumers had less disposable income or spent less disposable income on gold. “If you look at income, you have question marks about global growth — what it might mean; we have trade wars and the potential for higher inflation and the potential for even a recession or stagflation points to uncertainty around incomes too. That will have an impact if we see negative growth that is likely to mean jewellery will come under pressure. We have to wait and see how things play out.”
He said concerns about inflation and geopolitics had pushed investors to look for assets that would give them wealth protection, including gold.
On tariffs introduced by the Trump administration, Gopaul said: “Trade policy announcements and the tariffs that are in place have contributed to global uncertainty overall, and if you combine that with the concerns about a recession and the continued geopolitical tensions, it results in overall market volatility. That type of scenario seems to be supportive of gold, particularly as an investment where investors look to diversify into safe haven assets.”
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