Gold rush intensifies as investment demand surges

Rising geopolitical uncertainty boosts precious metal appeal, as investors increasingly shift toward safer asset classes globally

Global gold demand rose modestly in the January–March quarter of 2026, supported by a sharp rise in investment buying, even as jewellery consumption weakened under record-high prices. According to the World Gold Council, total gold demand, including OTC transactions, increased 2% year-on-year to 1,231 tonnes, compared with 1,205 tonnes in the same period last year.

Despite the relatively moderate rise in volume, the value of demand surged 74% year-on-year to a record $193 billion, reflecting a steep increase in gold prices. The average gold price during the quarter jumped 81% to $4,873 per ounce, compared with $2,860 a year ago, underlining strong investor appetite amid global uncertainty.

Investment demand, particularly for bars and coins, emerged as the key driver, rising 42% y/y to 474 tonnes. Heightened geopolitical tensions and market volatility boosted gold’s safe-haven appeal, drawing retail investors across regions. 

Demand in China surged 67% to a record 207 tonnes, while other Eastern markets, including India, South Korea and Japan, also recorded robust growth. Western markets followed suit, with demand rising 14% in the US and 50% in Europe.  Gold ETFs also recorded net inflows, with holdings increasing by 62 tonnes during the quarter, led by strong demand in Asian-listed funds. However, outflows in March, particularly from US funds, moderated overall gains.  In contrast, global jewellery demand declined sharply by 23% to 300 tonnes, as elevated prices dampened consumer purchases. 

Major markets such as China, India and the Middle East reported significant declines in volume. However, in value terms, jewellery demand remained resilient, suggesting continued consumer spending despite high prices. Central banks continued to underpin demand, adding 244 tonnes to global reserves during the quarter, above both the previous quarter and the five-year average. The Reserve Bank of India also added 300 kg of gold to its holdings. On the supply side, total gold supply rose 2% y/y to 1,231 tonnes, with mine production hitting a record for the first quarter and recycling increasing modestly.