The composition of global gold demand has shifted dramatically. The World Gold Council reported that total Q1 demand including OTC investment rose just 2% year-on-year to 1,231 tonnes in volume, but the value jumped 74% to a record $193 billion — reflecting the massive price surge that saw gold hit $5,595/oz in January.
The structural shift is clear: investment demand now exceeds fabrication demand. Bar and coin investment remains strong, driven by inflation hedging and geopolitical uncertainty. Metals Focus projects that for the first time, bars and coins will replace jewellery as the largest single component of gold demand in 2026.
Scrap supply rose 5% year-on-year in Q1, as high prices encouraged recycling. But Metals Focus notes that scrap gains are limited by holders' desire to retain gold as a safe haven. Mine production grew modestly, up 2% year-on-year.
Central bank demand has cooled from recent highs but remains supportive at a projected 700-900 tonnes for the full year, per the WGC. Banks including J.P. Morgan, Wells Fargo, and BNP Paribas cluster in the $5,000-$6,300/oz range for late 2026.
The shift from jewellery to investment demand means the price floor has changed. Gold is now structurally supported by institutional and central bank buying, not discretionary consumer spending. For procurement teams, this reduces the risk of sharp demand-driven corrections but means gold is likely to remain elevated — the Metals Focus 2026 average forecast is $4,920/oz. Consider forward contracts to lock in current levels.