New Delhi [India], April 29 : Surging gold prices and heightened geopolitical uncertainty are driving a shift in global gold demand from jewellery to investment, even as overall demand remains stable, according to the World Gold Council's Q1 2026 Gold Demand Trends report.
Total gold demand, including over-the-counter (OTC) transactions, rose marginally by 2 per cent year-on-year to 1,231 tonnes in the first quarter. However, the value of demand surged 74 per cent year-on-year to a record USD 193 billion, reflecting the sharp rise in prices during the period.
The report highlighted that higher prices and gold's safe-haven appeal attracted retail investors, leading to a strong rise in bar and coin demand, which jumped 42 per cent year-on-year to 474 tonnes. China led this surge, with demand rising 67 per cent to a record 207 tonnes, while other eastern markets such as India, South Korea and Japan also recorded increased buying, indicating a structural shift in consumption patterns.
This trend was also visible in Western markets, where bar and coin demand rose 14 per cent in the United States and 50 per cent in Europe. Physically-backed gold exchange-traded funds (ETFs) saw net inflows of 62 tonnes, supported largely by Asian-listed funds, although outflows in March from US-listed funds moderated the overall growth.
In contrast, jewellery demand declined sharply by 23 per cent year-on-year to 300 tonnes, as elevated prices impacted consumption across major markets, including China, India and the Middle East. The report noted that part of this decline reflects a shift towards bar and coin investment, particularly in markets where jewellery serves as a proxy for savings.
However, despite lower volumes, the value of jewellery demand increased, suggesting continued consumer spending.
Central banks continued to underpin demand, adding 244 tonnes to global reserves during the quarter, exceeding both the previous quarter and the five-year average, despite some selling by a few institutions.
On the supply side, total gold supply increased by 2 per cent year-on-year to 1,231 tonnes, with mine production hitting a first-quarter record. Recycling rose modestly by 5 per cent, indicating limited supply response despite high prices.
According to the World Gold Council, increased price volatility and geopolitical risks supported investment demand, particularly in Asia, reinforcing gold's role as a safe-haven asset.
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