Demand for physical gold is diverging sharply across regions, with US investors cashing in on their bullion holdings while Asian buyers ramp up their purchases. Data shows US retail demand for gold bars and coins dropped to roughly 19.3 tonnes in the first quarter of 2025 — a five‑year low, down 22% year‑on‑year — as Americans took advantage of record prices to realise gains.
Meanwhile, in Asia, appetite for physical gold remains robust. Chinese bar and coin demand reached its second‑highest level ever, with several countries in the region seeing 20–30% annual growth. Demand in India also surged amid price dips, driving improved retail activity even as premiums fluctuate.
Analysts attribute the US selling trend to a combination of factors: profit‑taking following gold’s spectacular rally — up nearly 40% over the past year — and a shift in investor preference toward ETFs. North American gold ETFs recorded an inflow of 134 tonnes in Q1 2025, suggesting that while physical purchases declined, financial instruments remained popular. Some US dealers report even charging customers to offload bullion, reflecting a surplus of minted coins like American Eagles, which saw production collapse over 70% year‑on‑year in May.
In contrast, Asia is sustaining its physical bullion demand with cultural and economic drivers. In China, ETF inflows surged to a record 70 tonnes in April alone, more than doubling any previous monthly record. The World Gold Council estimates this accounts for over half of total global ETF inflows. Retail buyers in India increased purchases during market dips, with dealers reporting premiums around $3 per ounce, signalling a strategic entry point.
Industry voices emphasise that regional differences stem from how gold is perceived. “In the US, investors view dollars as king; in Asia, they’d rather hold gold and silver,” says a market analyst, highlighting the cultural divergence. In Asia, gold functions as both adornment and investment. In India, jewellery remains closely priced to spot, supporting demand in festive seasons. Yet in the US, bullion coins dominate retail figures, and sentiment shifts with political and economic conditions.
A further pressure point is supply. Tariffs on Swiss refiners, including Pamp and Valcambi, have disrupted US bar availability, while dealers in New York’s Diamond District report high-volume transactions and collector interest in themed bullion — including Trump‑branded coins — alongside rising scrap gold selling.
Global gold demand remains healthy. First-quarter demand hit the highest since 2016, bolstered by central bank accumulation and investment flows, though jewellery sales contracted due to elevated prices. Central banks alone purchased over 1,000 tonnes in 2024.
Looking ahead, market watchers caution that the US may experience renewed physical demand if bullion prices retreat or geopolitical risks rise. Meanwhile in Asia, rolling demand persists through festivals and as investors diversify amid currency or real estate uncertainties. Dealers in India have begun offering steeper discounts to clear inventories during slower seasons such as the monsoon, while China, Singapore, Japan and Hong Kong are observing moderated premiums.
The current pattern underscores a global reshaping of gold dynamics. Institutional and sovereign actors, ETF investors and retail buyers across Asia are sustaining demand. In the US, physical selling contrasts with financial channel investment, but also reflects shifting investor preferences and broader economic optimism under current policy frameworks.
