Global gold demand increased by 2% year-on-year to 1,231 tonnes in the January-March quarter, according to the World Gold Council's Q1 2026 Gold Demand Trends report. While volumes remained modest, the value of demand surged to a record $193 billion, up 74% year-on-year. This growth was primarily driven by a sharp 42% surge in bar and coin investment to 474 tonnes, as reported by The Hindu BusinessLine. The average gold price during the quarter surged by 81% to $4,873 an ounce compared with $2,860 an ounce in the same period of 2025. WGC Regional CEO Sachin Jain noted that geopolitical tensions attracted retail investors globally to gold's price momentum and safe-haven appeal, driving bar and coin demand up 42%.
Demand for bars and coins in China surged 67% year-on-year to a record 207 tonnes, considerably higher than the previous quarterly record of 155 tonnes in Q2 2013. Other Eastern markets including India, South Korea and Japan also witnessed increased bar and coin buying, contributing to the ongoing structural shift in gold demand. This was supported by strong growth in the US and Europe, with increases of 14% and 50% respectively. As reported by The Hindu BusinessLine, WGC Regional CEO Sachin Jain explained that the impact of consumption via bars and coins further strengthened gold's safe haven appeal amid geopolitics and current global confusion.
Jewellery demand declined sharply by 23% year-on-year to 300 tonnes in reaction to higher prices throughout the quarter. Demand weakened across all major markets, with notable declines in China (32%), India (19%), and the Middle East (23%). However, in value terms, jewellery demand increased, indicating continued consumer willingness to spend on gold despite record prices. According to The Hindu BusinessLine, WGC Senior Markets Analyst Louise Street noted that gold's volatility has markedly increased in 2026, with prices peaking above $5,400 an ounce in January before a significant but contained correction. She added that the combination of price momentum and heightened geopolitical risk propelled investment demand, most notably in Asia, as investors sought security in physical gold.
Central banks continued to support overall demand, adding 244 tonnes to global reserves in the first quarter as purchases exceeded both the previous quarter and the five-year average. The Reserve Bank of India made a fresh purchase of 300 kg of gold during the January-March quarter. Meanwhile, physically-backed gold ETFs remained positive with holdings increasing by 62 tonnes, largely supported by continued strength across Asian-listed funds which added 84 tonnes over the quarter. However, sizeable outflows in March, mostly from US-listed funds, tempered what had been a very strong start to the year. As reported by The Hindu BusinessLine, total gold supply increased by 2% year-on-year to 1,231 tonnes, with mine production reaching a new first-quarter record.
