Abu dhabi: Global gold demand experienced a modest 2% increase in the first quarter of 2026, reaching a total of 1,231 tonnes, according to the World Gold Council’s Q1 2026 Gold Demand Trends report. Despite the relatively small rise in volume, the value of gold demand surged to an unprecedented US$193 billion, marking a 74% increase year-on-year.
According to Emirates News Agency, retail investors worldwide were drawn to the momentum of gold prices and its appeal as a safe-haven asset, resulting in a 42% year-on-year increase in bar and coin demand, totaling 474 tonnes. China saw a particularly significant surge, with demand skyrocketing 67% year-on-year to a record 207 tonnes, surpassing the previous high of 155 tonnes recorded in Q2 2013. Other Eastern markets, such as India, South Korea, and Japan, also witnessed increased bar and coin purchases, contributing to a structural shift in gold demand. The US and Europe saw bar and coin demand grow by 14% and 50%, respectively.
Physically-backed gold ETFs maintained positive demand in the first quarter, with holdings increasing by 62 tonnes. This growth was predominantly driven by Asian-listed funds, which added 84 tonnes over the quarter. However, substantial outflows from US-listed funds in March moderated the strong start to the year.
Conversely, jewellery demand experienced a sharp 23% decline year-on-year, totaling 300 tonnes due to higher prices throughout the quarter. Major markets, including China, India, and the Middle East, saw notable declines of 32%, 19%, and 23%, respectively. Despite this drop in volume, the value of jewellery demand increased, suggesting consumers remained willing to spend on gold amidst record prices. Analysis indicates that some jewellery consumption may have shifted to bar and coin demand, particularly in markets like China and India where jewellery often serves as a proxy investment.
Central banks continued to bolster overall demand by adding 244 tonnes to global reserves in the first quarter. These purchases exceeded both the previous quarter and the five-year average, despite sales by some institutions such as the Central Bank of the Republic of Trkiye, the Central Bank of the Russian Federation, and The State Oil Fund of the Republic of Azerbaijan. The quarter’s market activity highlighted gold’s role as an essential reserve asset during periods of extreme market volatility.
Gold supply increased by 2% year-on-year to 1,231 tonnes, with mine production setting a new first-quarter record. Recycling saw a modest 5% increase despite elevated prices, indicating a relatively muted supply response and tighter market conditions overall.
Louise Street, Senior Markets Analyst from the World Gold Council, noted the significant volatility in gold prices in 2026, with peaks above US$5,400 per ounce in January followed by a controlled correction. She emphasized that geopolitical risks have fueled investment demand, particularly in Asia, as investors sought security in physical gold. Central bank purchases have offset tactical selling, and while geopolitical risks are expected to continue supporting investment demand, prolonged high interest rates may pose challenges, especially in Western markets. Jewellery spending is anticipated to remain robust despite high prices impacting volumes. On the supply side, mine production is expected to grow modestly, though potential energy shortages could impact this outlook.