Global demand for physical gold surged at the start of 2026, driven largely by buyers seeking stability from geopolitical tension and volatile markets. Total gold demand reached roughly 1,231 metric tons in Q1, with bar and coin buying climbing 42% year-over-year from Q1 2025.
This shift marks a clear change in how gold is being used. Demand for gold as bars or coins now outweighs that of gold jewelry, which fell 23% year-over-year as high prices made purchases less affordable. At the same time, central banks continued to add to their gold reserves, purchasing more than 240 metric tons. This pattern reflects a broader move toward gold being held as a form of financial protection.
Recent trends suggest this demand is not temporary. Central banks have steadily increased gold’s share of reserves over the past decade while reducing reliance on the U.S. dollar. Analysts at major financial institutions note that this rebalancing, combined with continued buying in emerging markets, is helping support higher gold prices.
Gold’s outlook remains fueled by global instability and realignment. The World Gold Council expects geopolitical risks, inflation concerns, and currency pressures to keep demand elevated through 2026 and beyond. If central banks and buyers continue to increase their holdings at current levels, forecasts from institutions like Deutsche Bank suggest that gold prices could rise substantially over the next several years, underscoring the metal’s growing role as a core asset during uncertain times.
