Gold's Price Surge Driven by Investment Demand Rebound

Gold's price has been increasing sharply over the past five weeks, and investors are returning to the market. This is a bullish sign, as investment demand is the primary driver of major gold uplegs and bull markets.

The World Gold Council publishes quarterly reports on global gold demand, which include four categories: jewelry, investment, central banks, and technology. Investment demand is volatile and accounts for around 32% of overall gold demand, but it's a crucial factor in driving gold prices.

A recent example from the data shows that when gold rallied by 27.2% in 2024, investment demand surged by 25.3% year-over-year to 1,205 metric tons. In contrast, when gold skyrocketed by 64.3% in 2025, global investment demand skyrocketed by 83.3% YoY to 2,209t.

A good way to approximate daily gold investment capital flows is to track the holdings of physically-backed gold exchange-traded funds (ETFs). The three largest US ETFs - GLD, IAU, and GLDM - hold a significant portion of global gold bullion, with a combined 1,680t at the end of Q2'26.

Investors' capital inflows into these ETFs are self-reinforcing, as higher prices attract more investors. American stock investors control large pools of capital and often provide significant fuel for gold's price trends when they invest in it.