Physical investment in gold is set to outpace jewelry demand for the first time since 2013, offsetting declines in central bank purchases.
Gold demand is forecast to decline 2% to 4,177 tons in 2026, driven by an 11% drop in jewelry demand and reduced central bank buying. High prices are curbing jewelry purchases, while physical investment in bars and coins is expected to rise 15% to its highest level since 2013.
Central bank gold purchases are projected to fall 15% due to rising energy costs and currency interventions, which forced some banks to sell gold reserves. This shift marks the first time physical investment demand will surpass jewelry demand since data collection began.
The report anticipates a rebound in gold prices in the second half of the year, despite near-term demand headwinds.