Q1 2026: Investment Demand Continues to Surge as Gold Market Rebalances

The recent World Gold Council Gold Demand Trends: Q1 2026 report offers a comprehensive insight into current drivers of the gold market, serving as a valuable resource for precious metals investors.

The report highlights key demand trends and the near-term outlook for gold across investment, jewellery, central bank, ETF and technology demand sources.

A clear structural shift in gold markets is increasingly evident, with investment demand continuing to outpace traditional fabrication or jewellery demand segments. This illustrates gold’s growing popularity for both individual and institutional investors in the post-COVID era.

Total gold demand rose modestly by 2% year-on-year to 1,231 tonnes—however, value surged significantly, up 74% to a record USD $193bn. This is driven by a new quarterly average gold price record of USD $4,873 per troy ounce (oz).

These figures underscore how gold’s overall demand has remained relatively price inelastic, despite historically elevated price levels.

Investment since the onset of the COVID-19 pandemic remains the dominant demand force. Bar and coin demand surged 42% year-on-year to 474 tonnes, marking the second strongest quarter on record, with Chinese and Indian investors leading the charge (+67% and +34% year-on-year, respectively).

This reflects a growing preference for physical gold exposure amid persistent geopolitical uncertainty, thanks to inflationary concerns and limited alternatives when it comes to investments that offer the same liquidity characteristics and risk profile during an uncertain macro environment as gold does.

While ETF inflows remained positive (+62 tonnes in Q1 2026), momentum slowed significantly in comparison to levels seen over 2025 (+200 tonnes per quarter on average).

March outflows highlighted gold ETFs’ sensitivity to rate expectations and profit-taking activity, where a risk-off move in markets driven by the U.S.-Iran conflict led to a broader sell-off to fund liquidity requirements.  

Central bank demand remains a critical pillar, with net purchases of 244 tonnes in Q1 (+3% year-on-year). Purchases were led by Poland (31 tonnes) and Uzbekistan (25 tonnes) across the quarter. If these demand levels are sustained, it would not be surprising for net purchases to exceed 1000 tonnes again across 2026, in line with the yearly average since 2022.

Central bank buying activity continues to reflect a strategic push towards reserve diversification amid an increasingly inflationary and fragmented geopolitical landscape.

In contrast, jewellery demand continues to weaken in volume terms, falling 23% year-on-year to multi-year lows. Led by a demand reduction both in China and India (-32% and -19% year-on-year, respectively).

However, it’s important to note that consumer spending on jewellery rose sharply in comparison, reaching USD $47bn, the highest Q1 on record. This trend signals resilience in jewellery sentiment despite affordability constraints, seen through a higher volume of lower fine-weight purchases.

Looking ahead, these dynamics are likely to persist through 2026. Investment demand—particularly bar and coin—should remain well supported by geopolitical risk and inflationary pressures off the back of the U.S.-Iran conflict.

ETF flows may stay more constrained in a higher-for-longer rate environment unless we see renewed equity market weakness, which will drive safe-haven demand. Jewellery demand is expected to remain subdued in volume terms—however, value expenditure is likely to remain resilient.

Thank you for choosing ABC Bullion.

Jordan Eliseo
General Manager, ABC Bullion

Luke Tyler
Senior Analyst, ABC Bullion

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