Surging gold bar purchases led total bullion demand up 2% y/y in Q1

By Polina Devitt

LONDON, April 29 (Reuters) - Global gold demand rose 2% year-on-year to 1,230.9 metric tons in the first quarter of 2026 as a surge in purchases of gold bars and coins, as well as a 3% growth in buying by central banks offset a 23% decline in jewellery demand, the World Gold Council said on Wednesday.

Having revised supply and demand numbers for 2025, the WGC currently expects investment demand for bullion to rise by about 200 tons this year, jewellery fabrication to fall further and net purchases by central banks to remain steady at 700 to 900 tons despite some targeted selling due to the geopolitical risk amid the U.S.-Israeli war on Iran.

"The geopolitical risk premium that has helped lift gold over the past few years is set to continue and possibly expand as the year progresses," the WGC, an industry body whose members are global gold miners, said.

Having hit a 12-year high of 1,402.4 metric tons in 2025, demand for bars and coins added 42% year-on-year to reach 473.6 tons in the first quarter of 2026, the highest level since its record high set in the second quarter of 2013, the WGC's data showed. By value, the demand in this category reached $74 billion compared with the five-year quarterly average of $23 billion.

"This enormous number reflects strong demand from pretty much everywhere people buy gold in physical form," said John Reade, senior market strategist at the World Gold Council.

As the bulk of activity was concentrated in January, when a rapid record-setting rally took gold prices to $5,595 a troy ounce, the WGC expects these purchases to slow down compared with the first quarter.

The WGC's data shows that the first-quarter demand for bars and coins increased everywhere, except Iran and Vietnam, but leading purchases higher was China, the world's top producer and consumer, where demand for bars and coins rose 67% to 206.9 tons, the strongest quarter ever.

China's November VAT reform on gold jewellery led to a structural shift inside categories of bullion demand in the country, depressing jewellery demand and increasing demand for bars, Reade said.

Overall, weaker jewellery demand with higher investor interest in gold has changed the composition of demand for the precious metal in recent years with investment demand now steadily exceeding fabrication, the data showed.

Gold supply and demand by WGC*:

*Source: Metals Focus, ICE Benchmark Administration, World Gold Council via WGC.