Rising ownership of gold in Apac boosts its bullish price momentum

GOLD ownership in Asia-Pacific (Apac) has surged in recent years. The growth is led by key regional markets, where investors are increasingly turning to gold amid local economic uncertainty, geopolitical tensions, currency depreciation and uncertainty over risk assets.

Supported by proactive government initiatives, regulatory reforms and a growing emphasis on portfolio diversification, Apac is expected to remain a major force in global gold investment, enhancing the path to US$4,000 an ounce in 2026.

Surge in physical gold ownership

Over the past five years, Apac ownership of physical gold bars and coins has risen markedly. In the wake of the pandemic, investors have increasingly turned to gold for diversification, protection against volatility and potential for capital growth. During this period, the spot price of gold in US dollars climbed by 118 per cent, from US$1,517 an ounce at the start of 2020 to US$3,303 an ounce by June 2025.

Apac’s contribution to global demand also rebounded strongly in the past five years, rising from 39 per cent in 2020 to 69 per cent of global demand in 2025 – well above the 2010-2019 average of 63 per cent. This underscores the region’s renewed dominance in physical gold investment.

China and India remain key drivers of rising global demand, accounting for 53 per cent of global gold bar and coin demand.

China’s growing demand for gold was first fuelled by the underperformance of its domestic equity and property markets. Combined with uncertainty surrounding policy efforts to revive its slowing economy and limited reliable alternatives, gold has emerged as a preferred hedge for Chinese investors. In India, rising demand is supported by a robust local economy, rising income and continued weakness in the rupee.

Rising adoption of gold-backed ETFs

Apac pioneered gold-backed exchange-traded funds (ETFs) with Australia’s launch of the world’s first in 2003. As at June 2025, the region holds a record 368 tonnes, representing 10.2 per cent of global gold ETF holdings. Growth has accelerated since 2020, as institutional and retail investors alike embraced a more liquid, transparent and cost-effective way to gain exposure to gold.

This reflects a combination of macroeconomic factors, including inflation and local currency depreciation, and structural reforms that are broadening investor participation.

Policy reforms, government initiatives

Regulatory changes and new government initiatives will continue to support increased gold ownership in Apac.

• China launched a pilot programme allowing 10 domestic insurers to invest up to 1 per cent of their assets in gold, paving the way for institutional participation. With the People’s Bank of China increasingly focused on expanding gold exposure, there is potential for higher allocation limits.
• Key initiatives from the Hong Kong government include expanding vaulting capacity, upgrading infrastructure and tightening financial regulations to support gold trading and ownership, while closer integration with mainland China reinforces the city’s role as a global hub.
• The Indian government has introduced pro-gold reforms to cut import duties, marking the lowest levels in more than a decade. The holding period for long-term capital gains was also reduced from 36 to 24 months, with the tax rate lowered from 20 per cent (with indexation) to 12.5 per cent (without indexation). Further incentives will take effect in April 2026, with gold ETFs and mutual funds reclassified for tax benefits.
• Japan’s new NISA scheme, modelled after the UK’s ISA, raised the annual tax-free limit to 3.6 million yen (S$25,728), double the general NISA cap, and removed time restrictions allowing individuals to hold up to 18 million yen tax-free indefinitely. Aimed at mobilising Japan’s 1,127 trillion yen in idle bank deposits, the new framework includes gold investment trusts and ETFs to enhance accessibility for retail investors.

Significant growth potential

Last year, State Street Investment Management and the World Gold Council surveyed 63 Apac asset owners to assess how market conditions are influencing gold investment sentiment. The survey found that 24 per cent of Apac asset owners held no gold investments, but 27 per cent planned to increase their gold allocations over the next 12-18 months.

Respondents cited gold’s diversification benefits, its ability to enhance risk-adjusted returns, and its function as a hedge against weaker fiat currencies, among other things.

The growing appetite for gold among Apac asset owners is expected to remain a key catalyst for higher bullion prices, reflecting longer-term structural shifts rather than cyclical trends.

Supported by clear tax policies and macro tailwinds, and underpinned by its cultural significance, the growing interest from central banks, retail investors, intermediaries,and institutions diversifies sources of demand and underscores gold’s re-emergence as a strategic financial asset in the region.

The writer is Apac gold strategist, State Street Investment Management