As geopolitical tensions and inflation concerns remain “front and centre,” gold has firmly solidified its status as the ultimate strategic asset for both institutional and retail investors in 2026.

Global Market Highlights: A Value Explosion

Total global gold demand (including OTC) rose 2% year-over-year to 1,231 tonnes. However, the real story lies in the value of that demand; fueled by an exceptional price rally, the quarterly value jumped 74% to a historic record of 193 billion dollar.

• Investment Surge: Bar and coin demand hit 474 tonnes (+42%), marking the second-highest quarter on record, with Asian investors leading the buying spree.
• Central Banks: Net buying reached 244 tonnes (+3% y/y), even as some selling activity picked up during the quarter.
• Gold ETFs: Inflows continued with +62 tonnes added in Q1, though this was lower than the massive Q1 2025 growth of +230 tonnes due to US fund outflows in March.
• Jewellery & Tech: Global jewellery volumes fell 23% due to high prices, though spending rose 31%. Technology demand edged up 1% to 82 tonnes, supported by the expansion of AI infrastructure.

Value Doubles as Investors Pivot

India’s gold market mirrored global trends, showing a stark divergence between volume and value. Total demand in India for Q1 2026 reached 150.6 tonnes, a 10% increase from Q1 2025. Crucially, the total value of this demand nearly doubled, surging 99% to Rs. 227,530 crores.

The Investment Shift in India

Indian investors moved aggressively into gold as a strategic asset:

• Gold ETFs: Demand skyrocketed by 197% to 19.9 tonnes. In value terms, this was a massive 437% jump to Rs. 30,000 crores.
• Bars and Coins: Demand rose 34% to 62.3 tonnes, with the value soaring 142% to Rs. 94,130 crores.
• Recycling & Imports: High prices encouraged profit-taking, with recycled gold up 20% to 31.2 tonnes. Total imports rose 39% to 196.4 tonnes.

Jewellery Faces Headwinds

Elevated prices impacted traditional consumption:

• Volume: Jewellery demand dropped 19% to 66.1 tonnes.
• Value: Despite lower volumes, the value of jewellery sold rose 47% to Rs. 99,920 crores, reflecting the sheer price increase and a shift toward lighter pieces.

Expert View: Sachin Jain, CEO, WGC India

Sachin Jain noted that the Indian market is being shaped by “affordability constraints” in jewellery but bolstered by “increasing investor confidence”.

“Investment demand emerged as a key driver of overall growth… highlighting gold’s role as an effective hedge against inflation and market volatility,” Jain stated. Looking ahead, he expects the summer wedding season and festivals to support demand, estimating full-year 2026 demand to fall between 650-750 tonnes.”

2026 Outlook: Geopolitics and Inflation

The WGC maintains that geopolitics will remain “front and centre” for the remainder of 2026. Ongoing geopolitical risks, persistent high inflation, and record prices are expected to sustain central bank and investment demand, even as jewellery volumes remain under pressure.

FAQ’s

1. What are the key highlights of the WGC Q1 2026 report?
Global gold demand increased 2% year-on-year to 1,231 tonnes, while its total value jumped 74% to a record 193 billion dollar, driven mainly by higher gold prices and strong investment demand.

2. What is driving gold demand globally?
Investment demand, including bars, coins, and ETFs, along with steady central bank purchases, are the main drivers supporting gold demand despite high prices.

3. Why has jewellery demand declined?
High gold prices have reduced affordability, leading to a 23% drop in global jewellery volumes, although overall spending on jewellery increased due to elevated prices.

4. How did India’s gold market perform in Q1 2026?
India’s gold demand rose 10% to 150.6 tonnes, while its value nearly doubled by 99%, driven by strong investment demand, especially in ETFs and physical gold.

5. What is the outlook for gold demand in 2026?
Gold demand is expected to remain strong due to geopolitical risks, inflation concerns, and central bank buying, although jewellery demand may stay under pressure due to high prices.

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