World Gold Council: Q1 Report

Key Takeaways

• Gold demand hit a record US$193 billion in value in Q1 2026, up 74% year on year, driven almost entirely by price rather than volume.
• Bar and coin demand surged 42% to 474 tonnes, one of the strongest physical buying quarters on record, led by Asian markets.
• Jewellery volumes fell 23% as price weighed on buyers, but total jewellery spend still rose 31%, showing sentiment remains intact.
• Central banks added a steady 244 tonnes for the quarter, continuing a multi-year pattern of consistent accumulation.

Gold demand printed a record in value terms in Q1 2026, and the composition tells you exactly where the market is right now. Total demand came in at 1,231 tonnes, a modest lift year on year, but price did the heavy lifting. With gold averaging US$4,873 and reaching as high as US$5,405 during the quarter, total demand value jumped 74% to a record US$193 billion. That is not jewellery-driven demand. That is capital moving.

The shift underneath the surface is more important than the headline number. Bar and coin demand surged 42% to 474 tonnes, one of the strongest quarters on record, led heavily out of Asia. That is real buying, not paper flows, and it continues to confirm the bid for physical is still there at higher prices. ETFs did see inflows, but nowhere near last year's pace, with outflows appearing in March. That divergence matters. Physical accumulation is sticky. ETF flows are not.

Jewellery demand is getting squeezed. Volumes dropped 23% year on year, which is exactly what you expect when price runs this hard this quickly. But spending still rose 31%, which tells you sentiment has not broken. Buyers are still there, just adjusting size. This is classic late-cycle behaviour for gold, where investment demand overtakes fabrication and starts to dominate price direction.

Central banks remain steady in the background, adding another 244 tonnes for the quarter. It is not explosive buying, but it is consistent, and that consistency has underpinned the market for the last few years. Even with some visible selling, net purchases are still rising. When you combine that with rising geopolitical risk and persistent inflation pressure, it becomes difficult to build a bearish case that lasts.

Supply is not the story here. Mine production ticked higher and recycling picked up slightly, lifting total supply by around 2%. That is not enough to offset a structural shift in demand. The real change is that investment demand now clearly outweighs fabrication demand. That flips how gold trades: it becomes less about consumption and more about capital allocation.

The setup going forward is straightforward. Geopolitics remain front and centre, central banks are still buying, and investors continue to treat gold as a core allocation rather than a peripheral hedge. Jewellery will stay under pressure if price holds up here, but that is not what drives the next leg. Liquidity and risk will. If those remain elevated, the bid stays. If they accelerate, gold moves again.

Australians looking to position in physical gold ahead of the next move can explore Ainslie Bullion’s full range of gold bullion products at ainsliebullion.com.au.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.