Gold Demand Q1 2026: Investment Surges, Jewellery Falls — World Gold Council Report
The World Gold Council's Q1 2026 report reveals a significant shift in the gold market: investment demand is surging while traditional jewellery demand is falling. The quarterly average gold price hit a new record of $4,873 per ounce, with a historical peak of $5,405/oz in January.
Key Findings from Q1 2026
- Quarterly average price: $4,873/oz (new record)
- Historical high: $5,405/oz (January 2026)
- Q1 price return: +6%
- Gold supply increased 2% year-on-year to 1,231 tonnes
- Mine production grew modestly; recycling up 5%
Investment Demand Far Exceeds Jewellery
One of the most striking findings is that investment demand now far exceeds fabrication demand (jewellery, technology). This structural shift has been building for years but accelerated sharply in 2025-2026 as institutional investors, ETFs, and central banks increased their gold allocations.
Gold ETFs saw strong inflows throughout Q1, particularly from Western investors concerned about inflation and from Asian investors diversifying away from USD assets.
Jewellery Demand Under Pressure
Higher gold prices have hurt jewellery demand, particularly in price-sensitive markets like India and Pakistan. When gold crosses Rs. 400,000 per tola in Pakistan, many retail buyers delay purchases, waiting for a correction. Indian jewellery demand also softened as prices stayed elevated.
Central Bank Buying Continues
Central banks added significant gold reserves in Q1 2026, continuing a multi-year trend. Countries are diversifying away from US Treasury bonds and increasing their gold holdings as a percentage of total reserves. Geopolitics is a key driver — countries want assets that cannot be frozen or sanctioned.
Outlook for Q2 2026
The World Gold Council expects geopolitics to remain front and centre in driving gold demand. While short-term price volatility is likely, the structural demand picture remains positive. Investment demand is expected to stay strong, and central bank buying shows no signs of slowing.