Commodities April 29, 2026 02:05 AM

Gold demand reaches record volumes in Q1 2026 amid geopolitical turbulence

WGC reports modest volume growth pushes quarterly value to a record US$193bn as investment and central bank buying remain robust

By Maya Rios
Gold demand reaches record volumes in Q1 2026 amid geopolitical turbulence

Global gold demand rose to a record high in the first quarter of 2026, with total demand climbing 2% year-on-year to 1,230.9 tonnes. Strong bar and coin purchases, central bank net buying and continued inflows into bullion-backed ETFs supported the rise, while jewellery demand fell amid very high prices. The World Gold Council warns that geopolitical drivers will remain central to gold demand through 2026.

Key Points

  • Total global gold demand in Q1 2026 rose 2% year-on-year to 1,230.9 tonnes, setting a new quarterly record.
  • The value of quarterly demand jumped 74% to a record US$193 billion as high prices amplified modest volume growth; central bank net buying and bar and coin accumulation were major contributors.
  • Jewellery consumption declined 23% year-on-year to 335 tonnes, while gold-backed ETFs saw inflows of +62 tonnes in Q1, lower than the prior year's comparable quarter.

Global demand for gold reached a new quarterly peak in Q1 2026, the World Gold Council (WGC) reported on Wednesday, with total demand including over-the-counter bullion increasing 2% year-on-year to 1,230.9 tonnes.

WGC analysts led by Louise Street said that the modest rise in volumes, combined with a sharp increase in gold prices, produced a 74% jump in the monetary value of quarterly demand to a record US$193 billion. "This modest growth in volumes combined with gold's exceptional price rise, generated a 74% jump in the value of quarterly demand to a record US$193bn," the analysts wrote.

Investment in physical metal was a notable contributor. Bar and coin demand reached 474 tonnes, up 42% year-on-year and marking the second highest quarter on record, the WGC said. The council added that Asian investors were particularly active, "hoovering up gold investment products."

Despite the year-on-year increase, the headline demand figure declined 6% compared with the previous quarter, underscoring the volatility the market experienced in the period.

Price action in Q1 was dramatic. Spot gold initially surged, rising nearly 30% to an intraday record of $5,595.46 per ounce on January 29. That advance followed an exceptional 2025, when spot prices rose 64.5%, the WGC said, characterising 2025 as the metal's strongest annual performance since 1979. The council attributed the price run-up to a combination of safe-haven buying amid rising geopolitical risks and tariff uncertainty, softer interest-rate expectations, elevated central bank purchases and flows into bullion-backed exchange-traded funds.

Exchange-traded fund flows showed continuing, but slower, appetite for physically backed products. "Buying of gold-backed ETFs continued in Q1 (+62t), but at a lower rate than the very strong Q1'25 (+230t) following sizable outflows from U.S. funds in March," the WGC noted.

Official sector activity also remained prominent. Central banks were net buyers of gold, with net purchases of 244 tonnes in Q1, equivalent to a 3% year-on-year rise, the council said, even as it observed a visible increase in selling activity during the quarter.

Not all demand categories expanded. Jewellery demand fell sharply as prices reached record levels early in the quarter, slipping 23% year-on-year to 335 tonnes, the report found.

Monthly price swings added to the quarter's turbulence. After retreating from record highs in February while still posting an 8.5% gain for the month, gold plunged late in the month when, according to the WGC report, the U.S. and Israel launched a joint assault on Iran at the end of February. That sell-off continued into March, producing the metal's worst monthly performance in over a decade.

Looking ahead, the WGC analysts said geopolitical factors are expected to remain "front and centre in driving gold demand for 2026 and beyond." They said those dynamics underlie continued central bank net buying, broad global gold ETF inflows and further accumulation of bars and coins. The analysts also expected recycling to show a restrained increase in 2026 and for high prices to continue weighing on jewellery consumption. Finally, they noted that mine supply is likely to edge higher in response to elevated prices and margins.


Summary of Q1 2026 gold demand:

  • Total demand including OTC bullion: 1,230.9 tonnes (up 2% Y/Y)
  • Quarterly value of demand: record US$193 billion (up 74%)
  • Bar and coin demand: 474 tonnes (up 42%), second highest quarter on record
  • Gold-backed ETF net inflows: +62 tonnes in Q1 (down from +230t in Q1 2025)
  • Central bank net purchases: 244 tonnes (up 3% Y/Y)
  • Jewellery demand: 335 tonnes (down 23% Y/Y)

The WGC report paints a picture of a market buoyed by investment and official-sector demand but affected by sharp price volatility and shifting flows across investment vehicles.

Risks

  • Geopolitical volatility - ongoing conflicts and sudden escalations have driven large swings in gold prices and could continue to create sharp monthly reversals in the metal's value, affecting investors and ETF flows.
  • High gold prices - sustained elevated price levels are already reducing jewellery demand and may keep consumer and retail demand suppressed, impacting the jewellery and luxury goods sectors.
  • Market flow reversals - large outflows or sudden regional fund movements, such as the sizable U.S. fund outflows seen in March, can reverse ETF and investment trends quickly and influence liquidity in bullion markets.

More from Commodities

Gold Holds Near One-Month Low as Iran Tension and Fed Watch Temper Demand Apr 29, 2026 Oil Firms as U.S. Prepares to Extend Blockade of Iranian Ports, Raising Supply Concerns Apr 28, 2026 Oil Pulls Back From Three-Week Peak as UAE Quits OPEC and Hormuz Standoff Continues Apr 28, 2026 HSBC: UAE Exit from OPEC+ Likely to Have Small Near-Term Market Effect, Greater Long-Term Risks Apr 28, 2026 UAE Departure Reduces OPEC+ Market Control but Alliance Expected to Remain Intact Apr 28, 2026