War drives Q2 gold demand surge in Iran

Gold purchases soared in Iran in the second quarter, during a period marked by the war against Israel, despite particularly high prices, according to a report Thursday from the World Gold Council (WGC).

The demand for gold coins and bars in Iran is "at its highest in six years," the report says, with the yellow metal playing its role as a safe haven as tensions with Israel peaked with a twelve-day war at the end of June.

Purchases increased by 20 percent compared to the same period last year. Iranian demand for gold bars and coins even rose by 4 percent in the second quarter compared to the first three months of the year, while global demand fell by 6 percent over the same period.

Iran also stood out in the jewelry sector, with an increase in volume purchased in the country, while in this segment, demand has been strongly weakened elsewhere in the world due to very high gold prices. In this country, "buying jewelry has been one of the ways for people to invest in a safe haven," explains Louise Street, WGC analyst, driving demand up 12 percent year over year, versus a 14 percent drop globally in this category.

The contraction in volume does not prevent, on a global scale, consumers from pushing "the limits of their budgets," the analyst notes, with a 21 percent increase in the total value of jewelry purchased compared to the second quarter of 2024. Under these conditions, investment remains the largest segment of yellow metal demand, fueled by the enthusiasm for ETFs, exchange-traded funds backed by gold.

Quarter over quarter, gold investment is slightly lower than in the first three months of the year, which had seen the "shock" of the trade war, explains Street. But the factors that "created fertile ground for gold investment" at the start of the year, such as the United States’ erratic trade policy, the weakening of the dollar and geopolitical tensions, continued in the second quarter.