1. Background: Why Stylised Headlines Are Appealing

In recent years, gold has enjoyed a spectacular decade‑plus rally — doubling or more in price from lows in the early 2010s. Driving that surge were central banks building huge bullion reserves, soaring investment flows into ETFs, geopolitical jitters, and a weakened U.S. dollar.

As of mid‑2025, signals are emerging that this gold boom may be pausing. Headlines like “Is the gold boom over?” refer to a moderate slowdown in central bank demand, which has long underpinned gold’s structural strength.

2. What the News Article Reported

According to the article:

Central banks had been accumulating gold aggressively over recent years.
Now, however, their purchase pace is cooling, raising questions about whether gold’s rally may falter.

It cites data showing a drop in gold demand from central banks, though they still remain significant buyers. The article asks: Is this moderation the start of a sustained slowdown or just a temporary pause?

3. Global Context: Confirming Data and Trends

A. Central Bank Demand in Q2 2025 ↘️

World Gold Council (WGC) data shows that central bank purchases declined from 244 t in Q1 to 166.5 t in Q2, a 21% drop quarter‑on‑quarter. Even at 166 t, demand remains 41% above the 2010–2021 average.

B. Overall Gold Demand Still Rising

Global gold demand rose 3% YoY, reaching 1,248.8 t in Q2 2025. This was largely driven by a 78% jump in investment demand, including ETFs and bar/coin purchases. Meanwhile, jewellery demand fell sharply—by 14%, notably in China and India, due to very high prices.

C. Longer‑Term Outlook

Central banks added a total of 1,045 t in 2024, the third year in a row above 1,000 t.
For 2025, Metals Focus projects central bank purchases at about 1,000 t, slightly down on last year, marking a slower but still robust pace.
In the WGC’s 2025 survey, 95% of central banks expect to increase gold reserves over the next 12 months, with 43% expecting to increase their own holdings.

D. Drivers of the Trend

Buyers cite portfolio diversification, a weakening USD, and geopolitical uncertainty as motivations. Some analysts highlight competition from equities, platinum, and crypto, while jewellery consumption weakens under record-high gold prices.

4. India‑Specific Angle: RBI, Retail Demand, and Prices

A. RBI’s Gold Activity

In 2024, the Reserve Bank of India (RBI) purchased around 73 t, up from just 16 t in 2023—a sharp increase.
In late 2024, RBI also repatriated part of its gold reserves—transferred storage location, not a net addition or sale.

B. Indian Consumer Demand

Jewellery demand in India fell sharply in Q2 of 2025, by ~17%, due to high prices deterring buyers.
On domestic exchanges like MCX, gold futures touched ₹97,505 per 10 g in June 2025, reflecting elevated price levels.

5. So – Is the Boom Over? A Balanced Perspective

✅ Why it May Be Just a Pause:

Central banks continue to affirm long‑term confidence in growing gold reserves—95% plan to buy more.
Investments via ETFs, especially in Asia, remain strong and are expected to remain elevated.
Macro uncertainties—trade tensions, government deficits, and geopolitical risks—still support demand.

❌ Why momentum may be fading:

Quarterly central bank demand dropped meaningfully from Q1 to Q2 (244 t → 166 t), pointing to a slowdown in urgency.
Physical jewellery demand—a cornerstone of Indian gold demand—has fallen sharply amid high prices.
Investors are showing enthusiasm for equities, platinum, and even crypto alternatives like Bitcoin, reducing gold’s share in portfolios.

6. Implications for Indian Readers & Investors

Retail Investors & HNI: Prudent investors may wish to maintain a modest allocation in gold or gold ETFs as a hedge, especially given prospects of policy rate cuts and continued geopolitical uncertainty.
Jewellery Buyers: With jewellery demand softening at current rates near ₹97–98 k per 10 g, buyers may wait for consolidation or a dip in gold price before making large purchases.
RBI & Sovereign Insight: India is among the few nations boosting central bank holdings. While the pace may slow, the long‑term trend favors accumulation—especially given India’s ongoing currency diversification efforts.
Future Outlook: Gold price forecasts remain cautiously optimistic. Goldman Sachs projects $3,100–$3,300/oz by end-2025, while others see potential for $3,500+ if further uncertainty intensifies and central banks sustain buying.

7. What Indian Readers Should Watch

Indicator	Why It Matters
Q3/Q4 gold demand (Global, WGC data)	Will central banks continue to slow?
Inflows into gold ETFs (especially Asia-focused)	Shows investor appetite beyond physical purchases
Indian retail volumes & prices on MCX	Reflects consumer willingness and affordability
RBI statements on reserves & repatriation	Clues to sovereign strategy
Global signals: USD index moves, Fed policy direction, trade war tension	Strong influence on gold flows

8. Conclusion: Is Gold Still a Good Hedge for India?

While the explosive pace of gold accumulation by central banks has softened, gold’s structural positioning remains strong. Central banks still hold large and growing allocations; 95% expect more purchases over the next year. Investment demand, though already elevated, continues to flow.

For Indian consumers and investors:

Jewellery demand may remain subdued while prices stay elevated.
For risk-averse portfolios, gold or gold ETFs remain valuable hedges, especially if inflation worries, global debt levels, or geopolitical tensions re‑intensify.
A slowdown in central bank buying may temporarily cap further upside, but it does not signal a reversal of the decade‑long gold bull market.