- What's Driving This Shift?
- Gold Consumption: Then vs Now
- Things to Keep in Mind
- The Bottom Line
In CY24, gold ETFs accounted for nearly 0% of global gold consumption. In CY25, that number jumped to 16%. That's not a gradual rise, that's an entire category of demand appearing almost overnight.
This blog breaks down why this shift happened, how it's showing up in India, and what it means for the way people are buying gold today.
What's Driving This Shift?
1. Global ETF holdings hit near-record levels
Gold ETFs globally added 801 metric tonnes (MT) in CY25, the second-highest annual addition ever recorded. To put this in perspective, total global investment demand reached 2,175 MT in CY25, smashing the previous record of 1,805 MT set during the pandemic year of CY20.
The key drivers behind this surge? A combination of elevated geopolitical risks, safe-haven demand, and investors actively looking to diversify away from traditional assets.
2. India's ETF boom outpaced the last decade
Indian investors added 37.5 tonnes to gold ETFs in CY25. That single year's inflow is more than the total gold ETF investment Indians made in the previous 10 years put together.
This tells us something important: Indian retail investors are increasingly treating gold as a financial asset, not just something you buy at a jewellery store.
3. Bar and coin buying also accelerated
It's not just ETFs. Physical investment demand, bars and coins, hit a 12-year high globally. In India, the share of investment (ETFs + bars + coins) in total gold consumption jumped from 29% in CY24 to 42% in CY25. Nearly half of all gold bought in India is now for investment, not adornment.
4. Jewellery lost significant wallet share
As gold prices climbed to record levels, consumers globally cut back on discretionary jewellery purchases. The share of jewellery in global gold consumption dropped to 33% in CY25, well below its 15-year average of 50%. In India, jewellery's share fell below 60%, compared to a long-term average of around 70%.
Gold Consumption: Then vs Now
| Metric | CY24 | CY25 | Long-term Average |
| ETF share in global consumption | ~0% | 16% | — |
| Jewellery share (global) | ~52% | 33% | 50% |
| Jewellery share (India) | ~70% | <60% | 70% |
| Investment share (India) | 29% | 42% | — |
| Indian gold ETF addition | — | 37.5 tonnes | — |
| Global investment demand | — | 2,175 MT | — |
One nuance worth noting: Indian jewellery spending actually rose 10% year-on-year to ₹4.8 lakh crore in CY25, growing at an 11% CAGR over CY21–25. But volume fell 15%. What does that mean? People are spending more rupees on gold jewellery, but buying lighter pieces and lower-carat options. The appetite is there, but the price is forcing adjustments.
Things to Keep in Mind
- ETF flows can reverse quickly. The 801 MT inflow is impressive, but ETF investors tend to react to macro conditions. After CY20's record inflows, subsequent years saw significant outflows. This pattern could repeat.
- Don't confuse falling jewellery volumes with falling interest. Indians still spent ₹4.8 lakh crore on jewellery in CY25. The demand is real, it's just showing up in smaller, lighter purchases rather than heavy traditional pieces.
- India's ETF base is still small in absolute terms. 37.5 tonnes sounds like a lot (and it is, relative to history), but it remains a tiny fraction of India's total gold holdings. The shift is directional, not dominant, yet.
- Geopolitical risk is the biggest demand driver right now. If global tensions ease or risk sentiment improves, the urgency behind ETF buying could cool down. Much of this demand is reactive, not structural.
- The jewellery-to-investment shift may be long-term. As more Indians get comfortable with financial products like ETFs and SGBs, the composition of gold demand could permanently tilt toward investment. But it's too early to call this irreversible; we need 2–3 more years of data.
The Bottom Line
Gold consumption is undergoing a real composition change globally and in India. The shift from jewellery-heavy buying to investment-heavy buying (ETFs, bars, coins) is backed by hard data, not speculation. India's 37.5-tonne ETF inflow in a single year, exceeding an entire decade's worth, is a genuinely significant milestone.
That said, ETF-driven demand is closely tied to macro uncertainty. If geopolitical risks ease, this number could moderate just as quickly as it surged. The trend is worth watching, but not worth over-extrapolating from one year's data.
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