(Kitco News) – China and India accounted for over 50% of the world’s consumer gold demand last year, and Asia’s massive appetite for physical bullion is fueling rapid growth in the region’s derivatives markets, according to a new report from CME Group.
“Gold has experienced a significant bull run over the past two years, with prices increasing by 12% in 2023 and a further 29% in 2024,” wrote Cameron Liao, Director, International Research and Product Development at CME Group. “Gold has continued its strong performance in 2025 as a perceived safe haven amid concerns over uncertainty around trade policy, expected cuts in U.S. interest rates and heightened geopolitical risks.”
Liao wrote that gold has always been highly valued in Asian cultures, both as a symbol of wealth and a store of value, and the continent is the engine of global gold demand.
“China and India, with a combined population of 2.8 billion, have strong jewelry and investment demand, making them the world's two largest gold consumers,” he noted. “Collectively, these two nations accounted for over half of global gold consumer demand in 2024, according to data from industry group World Gold Council (WGC). Other economies in Asia, such as Thailand, Malaysia, Vietnam and South Korea, are also significant gold consumers.”
And with prices setting fresh record highs well above $3,000 per ounce, gold is garnering increasing attention as an investment asset as well as a safe haven amid rising geopolitical risk.
Asia's longstanding and strong demand for physical gold is now being reflected in the derivatives markets. “Liquidity in COMEX Gold futures (GC) during Asian hours (defined as 6 a.m. to 6 p.m. Singapore time) has surged with gold prices,” Liao said. “Historically, Asian hours volume accounted for approximately 25% of total trading volume; this share grew to over one-third in the second quarter of 2025.”
“This increased trading activity during Asian hours reflects growing interest in derivatives trading from market participants in the region, which in turn facilitates more efficient price risk management,” he added.
And this sharp rise in liquidity is even more pronounced in Micro Gold (MGC) futures, where activity has surged dramatically.
“This contract, sized at 10 troy ounces (one-tenth of the benchmark 100 troy-ounce Gold futures), caters to traders seeking exposure in smaller lots, which is especially pertinent given the rising gold price,” Liao noted. “Daily MGC volume, which typically ranged from 50,000 to 60,000 contracts before the recent price surge, now averages near 300,000 contracts per day. Concurrently, the share of Asian hours activity has also significantly improved. As of Q2 2025, volume during Asian hours represented approximately 42% of global MGC trading, a 16-percentage point increase compared to two years ago.”
Micro Gold futures are also showing competitive bid/offer spreads, which are used to gauge market liquidity and which have a direct impact on trading costs. “Overall, Micro Gold futures consistently exhibit stable liquidity, with the bid/offer spreads averaging 2.01 ticks across all trading hours,” Liao pointed out. “The market shows an even tighter spread of 1.98 ticks during Asian hours, reflecting increased activity in the region/time zone.”
Going forward, CME Group expects gold prices to remain a key focus of investors due to the ongoing uncertainties surrounding economic performance, trade, monetary policy, and geopolitics.
“Factors such as ongoing geopolitical conflicts, potential changes to U.S. interest rates, tariff policy adjustments and evolving central bank reserve strategies could be supportive for gold,” Liao said. “Conversely, record-high prices and slowing economic growth could dampen jewelry consumption,” while [p]rofit-taking, potential market corrections and competition from other investment assets might also temper the gold rally.”
“Gold is poised to remain the center of attention as market participants navigate these complex dynamics.”
The Asian session is also driving recent price action, with spot gold rising as high as $3,393.55 per ounce in overnight trading before pulling back to test support near $3,375.
Spot gold last traded at $3,382.73 per ounce for a loss of 0.32% on the daily chart.
