Singapore Ignites a Gold Rush: Bullion Demand Hits 15-Year High Amidst a Regional Scramble for Safety
In the turbulent economic seas of early 2025, a powerful current pulled investors towards an age-old anchor: gold. Nowhere was this phenomenon more pronounced than in the financial hub of Singapore, where a veritable gold fever swept through the investment community. In the first quarter of the year, investors in the Lion City acquired a staggering 2.5 tonnes of physical gold bars and coins. This wasn’t merely an uptick; it was a resounding 35 per cent year-on-year surge, catapulting demand to its highest point since the World Gold Council (WGC) began compiling such data in 2010. The message from the market was clear and unambiguous: in a world fraught with uncertainty, the tangible, immutable allure of bullion has never been stronger.
This dramatic rush into physical gold, detailed in the WGC’s comprehensive Q1 2025 Gold Demand Trends report, paints a vivid picture of a region grappling with economic anxiety and geopolitical tremors. While Singapore led the charge, it was not alone in its quest for the security that only the yellow metal seems to provide.
The Singaporean Surge: A Quest for a Tangible Haven
The 2.5-tonne figure for Singapore is more than just a statistic; it represents a profound shift in investor psychology. This demand is the highest quarterly figure on record, eclipsing moments of past global crises and market volatility. It signals a deep-seated desire among Singaporean investors, from high-net-worth individuals to the everyday saver, to diversify their portfolios away from more volatile paper assets and into something they can see, touch, and store.
The Psychology Behind the Purchase
What is driving this insatiable hunger for the yellow metal? The reasons are multifaceted, reflecting the complex global landscape of 2025. Persistent inflation continues to erode the purchasing power of fiat currencies, making gold, a classic inflation hedge, exceptionally attractive. Furthermore, ongoing geopolitical tensions, from simmering trade disputes to unpredictable political cycles across the globe, have heightened risk perception. In such an environment, gold’s status as a ‘safe-haven’ asset, independent of any single government or financial system, becomes its most compelling feature. Investors are not just buying a commodity; they are buying peace of mind, a physical insurance policy against systemic financial and political risk.
A Divergent Tale Across Southeast Asia
The story of soaring gold demand reverberated throughout the ASEAN region, though with notable and telling variations. The quest for security was a shared sentiment, but local economic conditions created a fascinatingly diverse marketplace.
Neighbors Join the Fray: Indonesia, Malaysia, and Thailand
Following Singapore’s lead, investment demand for gold bars and coins grew at impressive double-digit rates in Indonesia, Malaysia, and Thailand. This synchronized movement underscores a shared regional concern about the global economic outlook. For millions of citizens in these rapidly developing economies, gold is not just an investment but a traditional form of savings and wealth preservation, deeply embedded in the cultural fabric. The first quarter of 2025 saw this tradition transform into an active financial strategy, as more people sought to protect their wealth from currency fluctuations and the long shadow of global instability.
Vietnam’s Contrasting Current
In a stark departure from the regional trend, Vietnam experienced a significant cooling in its typically fervent gold market. Demand for gold bars and coins in the country fell by 15 per cent year-on-year, settling at 12 tonnes. This decline was not due to a lack of interest, but rather to severe market frictions. The WGC report attributes this drop to two primary factors: soaring local premiums on gold products due to limited supply, and the persistent depreciation of the local currency, the dong.
For the average Vietnamese buyer, this created a perfect storm. Not only was the international price of gold hitting record highs, but domestic market constraints were adding a hefty premium on top of that. The weakening dong meant that it took more of the local currency to purchase the same amount of a dollar-denominated asset like gold, effectively pricing many potential buyers out of the market. This highlights a crucial dynamic: while the desire for gold may be universal, the ability to acquire it is heavily influenced by local economic realities.
The Price of Beauty: Jewellery Demand Dims in Gold’s Glare
As the price of gold bullion soared to unprecedented heights, hitting 20 all-time price records in the first quarter alone, one segment of the market inevitably felt the chill: gold jewellery. The inverse relationship between high gold prices and jewellery consumption played out across the globe, and the ASEAN region was no exception.
A Global Trend Mirrored in ASEAN
Fan Shaokai, Head of Asia-Pacific (ex-China) and Global Head of Central Banks at the WGC, noted that the global demand for gold jewellery fell to its lowest level since the COVID-19 pandemic stifled the market in 2020. He described this downturn as “unsurprising,” a logical consumer response to record-shattering prices. When the raw material becomes prohibitively expensive, discretionary purchases like necklaces, bracelets, and rings are often the first to be postponed.
In Singapore, this trend was particularly sharp. Jewellery demand plummeted by 20 per cent compared to the same period last year, with consumers purchasing 1.7 tonnes. The sparkle of new jewellery was overshadowed by the gleaming weight of investment bars, as consumers prioritized financial security over adornment.
The Keepers of the Vault: Central Banks Continue Their Buying Spree
It wasn’t just individual investors who were stocking up on gold. The world’s central banks continued their long-standing policy of adding the metal to their official reserves, marking the 16th consecutive year of net purchases. In the first quarter, these institutions collectively added a robust 243.7 tonnes of gold to their vaults.
The Rationale for Hoarding
According to Fan Shaokai, this sustained buying is driven by a clear strategic mandate: portfolio diversification, risk management, hedging against inflation, and protecting national wealth from geopolitical and market volatility. In an era where trust in traditional reserve currencies like the US dollar is being questioned, central banks are increasingly turning to gold as a neutral reserve asset that holds its value across borders and through crises.
While this 243.7-tonne figure is substantial, it represents a 21 per cent decrease from the exceptionally high 309.9 tonnes purchased in Q1 2024. However, the WGC was quick to put this in context, highlighting that the demand remains “healthy.” It stands 24 per cent above the five-year quarterly average, underscoring that the long-term strategic shift towards gold by monetary authorities is firmly intact. In a notable regional move, the Monetary Authority of Singapore was a net seller of three tonnes during the quarter, a minor rebalancing act that maintained its total gold holdings at approximately 220 tonnes.
The Complete Picture: A Resilient Overall Demand
When all facets of the market are combined—investment, jewellery, central bank buying, and technology uses—the overall demand for gold in Q1 2025 stood firm at 1,206 tonnes, a modest but steady 1 per cent increase year-on-year. “Amid the ongoing geopolitical tensions and global market volatility, gold, a traditional safe-haven asset, continues to perform strongly, with global gold demand reaching its highest first-quarter level since Q1 2016,” said Fan.
A key driver of this stability was the dramatic revival of interest in gold-backed Exchange-Traded Funds (ETFs). After a period of outflows, Q1 2025 saw a massive reversal, with ETFs registering net inflows of 226.5 tonnes. This is in stark contrast to the net outflows of 113 tonnes during the same period last year, indicating a powerful return of institutional and retail investor confidence in gold as a liquid investment vehicle.
Peering into the Golden Future: The Outlook for 2025
Looking ahead, the forces that propelled gold to new heights in the first quarter show little sign of abating. The WGC anticipates that a combination of near-term stagflation risks, medium-term recession fears, and persistently elevated geopolitical tensions will continue to fuel robust investment demand for gold.
Louise Street, a Senior Markets Analyst at the WGC, commented on the forward path: “Looking ahead, the broader economic landscape remains difficult to predict, and that uncertainty could provide upside potential for gold.”
The council expects demand for physical bars and coins to “stay resilient rather than strong,” suggesting that while the underlying motives for buying remain, the record-high prices may temper the pace of purchases. Conversely, the outlook for jewellery demand remains subdued. While some may be tempted to recycle old jewellery to cash in on high prices, the WGC believes this response will be tempered, as much of the near-market stock has already been sold or used as collateral in previous price rallies.
In conclusion, the first quarter of 2025 solidified gold’s role as the ultimate asset for an uncertain age. From the trading floors of Singapore to the vaults of central banks, the message was one of a deep and abiding search for security. As investors and nations navigate the challenges ahead, the ancient gleam of gold continues to serve as a beacon of stability in a volatile world.
