ASTANA – Global gold demand surged 45% year-on-year in value terms to $132 billion in the second quarter of 2025, reaffirming the metal’s strong role as a safe-haven asset. Kazakhstan is aligning itself with this global trend, leveraging its gold market and substantial reserves, as experts highlight the resilience of gold amid geopolitical shocks and market fluctuations.

Photo credit: ebcfin.co.uk

Gold momentum

According to the World Gold Council, a London-based industry body, gold demand increased by 3% in quantity terms to 1,249 tons.  “Uncertain global trade policy, geopolitical turbulence and the rising gold price all fuelled inflows,” writes the council in its latest report. 

Gold prices in a 10-year period. Photo credit: World Gold Council

“Inflation, triggered by such monetary expansion, pushes bond yields higher and their prices lower, causing losses for investors who hold them. Those same investors are then bailed out by central banks, which step in by cutting interest rates and expanding monetary issuance even further,” he added.

Global trends

Experts note that the precious metal broke records 40 times in 2024 alone, and another 26 times in the first half of 2025. 

“Gold has been growing in 2023, and last year saw new peaks against a backdrop of record growth of global equity indices. A similar pattern was observed in 2019, when the S&P 500 rose 29% while gold climbed 19%, only to reach new records the following year at the height of the COVID-19 pandemic, when U.S. markets faced unprecedented declines,” writes Amir Aktanov from the Analytical Center of the Halyk Finance, an Almaty-based investment bank.

To put it in perspective, it took just 210 days for gold to jump from $2,500 to $3,000 per ounce, compared to approximately 1,700 days for previous $500 increases.  

Strong demand from central banks

Experts agree the rally is driven by both investor demand and central bank purchases. 

Gold is a significant component of central banks’ reserves. According to Aktanov, central banks have been net buyers of gold for 15 consecutive years, and in the past three years, they have purchased more than 1,000 tons annually. 

Photo credit: World Gold Council

According to the World Gold Council, central banks account for approximately one-fifth of all the gold mined throughout history. In 2024, for example, central banks purchased 1,045 tons of gold. The National Bank of Poland was the largest gold buyer last year, adding 90 tons to its gold reserves. 

For Kazakhstan, gold presents an opportunity. The country’s bullion market is becoming an increasingly important piece of its diversification strategy. 

For 11 consecutive years, from 2011 to 2021, Kazakhstan steadily increased its gold reserves, purchasing more than 335 tons of gold. In February 2025, however, the National Bank suspended gold sales from its foreign exchange reserves amid what it described as the “complex geopolitical situation in the world.”

“That trend shifted in 2022–2024, when Kazakhstan began selling the precious metal to diversify its reserves. In 2022 and 2023, the country sold 50.7 tons and 57.4 tons, respectively. Last year, sales slowed to 10.2 tons. In the first five months of 2025, Kazakhstan reversed course, becoming a net buyer once again and adding 14.7 tons to partially rebuild its partially depleted foreign exchange reserves,” Aktanov explains.

According to the World Gold Council, as of June, Kazakhstan’s gold reserves hit 306.2 tons. The U.S. leads in gold reserves, with 8,133 tons, followed by Germany with 3,350 tons, and Italy with 2,452 tons.  

This move indicates Kazakhstan’s central bank is back in line with global central bank behavior, as regulators worldwide continue to prioritize gold. As of July, Kazakhstan’s gross foreign reserves reached $52.5 billion, of which gold accounted for $32.8 billion in monetary terms. 

The World Gold Council noted that 95% of respondents in their 2024 Central Bank Gold Reserves Survey indicated positive momentum and expect continued strong interest from central banks in increasing their gold allocations in the near term. 

Geopolitical shocks

Geopolitical shocks reshape dynamics in many sectors, and gold is no exception. Considered by many as a safe-haven asset, gold has benefited from geopolitical uncertainties. 

“The escalation of the conflict in the Middle East in June sent gold prices to absolute historic highs. As a result of the armed conflict between Iran and Israel, gold rose to $3,432 per troy ounce, renewing the high reached in May 2025,” Aktanov writes. 

For governments worldwide, the freezing of more than $280 billion of Russian assets by G7 countries following the invasion of Ukraine demonstrated a new geopolitical risk that foreign reserves held abroad may no longer be untouchable. Those holdings were largely euro-denominated securities, as well as U.S. dollar and other currencies. 

This, in turn, made governments increasingly turn to gold. According to Goldman Sachs Research, central banks have increased their gold buying on London’s over-the-counter market fivefold since 2022.

Aktanov also explains how China’s weakening relations with the United States impact gold dynamics. Between January and May, the People’s Bank of China added 16.8 tons of gold, compared with 44 tons and 225 tons acquired during the same periods of the previous two years. 

“The re-election of Donald Trump is adding further strain to U.S.-China relations. In his first term, Trump escalated tensions with China by launching a trade war against Beijing,” Aktanov wrote. 

In this context, China is selling off its holdings of U.S. Treasuries and increasing its purchases of gold. In April 2025, the figure dropped to its lowest since February 2009, reaching $757.2 billion. 

Outlook

Aktanov expects the risks of market volatility and unpredictability to sustain strong demand for gold.  

In its May report, Goldman Sachs also stated that the increasing gold appetite among investors, driven by concerns about market volatility and the state of the economy, as well as continued demand from central banks, will push the metal to new highs. 

“Whenever there’s a lot of uncertainty, traders temporarily park their money in gold. When there’s clarity, gold prices tend to drop again because traders know what to do with their money,” said Lina Thomas from Goldman Sachs Research. 

According to Goldman Sachs’ forecast, the price of gold is expected to reach $3,700 per troy ounce by the end of 2025. 

Kombarov echoes this sentiment. 

“The dynamics of gold prices in tenge have almost always been positive, as in other currencies. Over the past year, the price of gold in tenge has risen by 48%. Over five years, it has increased by 121%, and over 20 years by 2,955%,” Kombarov said. 

“I believe investments in gold are optimal in terms of the balance between profit and risk. Stocks may offer higher returns, but they also carry greater risk,” he added.

Kazakhstan’s expanding production

Kazakhstan ranks 14th globally in terms of gold production. In 2024, the nation produced 87 tons, compared to 129.1 tons produced by its neighbor Uzbekistan, which ranked 10th. China was the world’s largest gold producer in 2024, accounting for approximately 10% of total global production.

Over the next three years, Kazakhstan’s gold mining industry is set to implement 13 projects, attracting 780 billion tenge (US$1.5 billion) in investments, according to the figures from the Monitoring and Analysis Directorate of QazIndustry’s Center for Industry and Export. These projects are expected to create around 3,400 new jobs.

From 2025 to 2028, the combined processing capacity of the projects will reach 20.6 million tons of ore, equivalent to 21 tons of doré alloy. 

“These prospects allow Kazakhstan to steadily strengthen its position in the global precious metals market. The country’s rich resource base, which includes large deposits of gold and other precious metals, boosts its investment appeal for future gold processing projects,” said the center. 

Over the past decade, 19 projects have been launched in Kazakhstan to build, modernize, and expand mining and processing plants with a combined capacity of 27.2 million tons. The total investment volume reached approximately 460 billion tenge (US$853.4 million), resulting in the creation of 4,400 jobs.

More than half of the investments in these projects went into building gold recovery plants, including at the Raigorodok deposit in the Akmola Region, with an annual capacity of five million tons of ore, and at the Bakyrchik deposit in the Abai Region, with a capacity of two million tons of ore.

The largest number of ongoing and upcoming projects is in the Akmola and Karagandy regions. 

“Kazakhstan’s gold mining investment projects are steadily advancing and hold strategic importance. The growth of high-tech production, international cooperation, and government support provides a strong foundation for further development of the sector and its integration into the global market,” said the center.