World Gold Council Cuts 2026 Investment Demand Growth Forecast to 200 Tonnes
Key Facts
The World Gold Council cut its forecast for average annual growth in investment demand for gold in 2026 to 200 tonnes from 400 tonnes in its previous estimate, compared with 2025. The council published the revision in its Gold Demand Trends report for the third quarter, released on 3 November. The change applies to investment demand, while total global demand remained close to the record level recorded in the same period last year. The council said gold ETF inflows in the third quarter exceeded its expectations, but demand for bars and coins slowed markedly in the second half. It said fiscal concerns and broader uncertainty contributed in part to strong ETF inflows.
Total global gold demand, including over-the-counter trading, reached 1,369 tonnes in the third quarter, down 1% year on year. Demand since the start of the year stood at 3,881 tonnes, compared with the record 3,884 tonnes in the corresponding period of 2025. Among investment components, gold ETFs added 211 tonnes in the third quarter after recording outflows in the second quarter. The council said concerns about fiscal sustainability and inflation were among the drivers of ETF demand. Holdings in physically backed funds rose to a record 4,256 tonnes at the end of the quarter.
By contrast, global demand for bars and coins fell 19% year on year to 268 tonnes in the third quarter. The council said this demand remained relatively resilient but slowed markedly in the second half as investors awaited a clearer price direction. Louise Street of the council also said retail investors were hesitant because the price direction was unclear, while ETF inflows returned strongly, supported by geopolitical risks and fiscal discipline concerns. Jewellery consumption fell 17% to 313 tonnes, its weakest third quarter in the council's data series. The council attributed pressure on this component to higher prices.
On the official demand side, net purchases by central banks and other official institutions reached 321 tonnes in the third quarter, up 42% year on year and the highest quarterly level since the fourth quarter of 2024. Their purchases since the start of the year rose to 675 tonnes, up 6% from the same period last year. China and Poland together accounted for 104 tonnes, equivalent to about 86% of reported net purchases; the People's Bank of China added 63 tonnes and the National Bank of Poland 40 tonnes. Reported purchases totalled 120 tonnes, against estimated total demand of 321 tonnes, with unreported activity accounting for about 63% of quarterly demand. Over-the-counter demand and other sources also rose to 143 tonnes, from 101 tonnes a year earlier.
Gold used in the technology sector recorded a 3% annual increase in the third quarter, as demand linked to manufacturing AI products offset the effect of higher prices. The average gold price under the London Bullion Market Association's afternoon benchmark was $4,262 an ounce, up 23% year on year and the third-highest quarterly average on record. In the 3 November session, the GCUSD gold contract settled at 3,940.4, after closing at 3,969.6 on 2 November. The contract had recorded 3,898.9 on 30 October, after closing at 4,031.4 on 29 October. A Reuters report attributed gold's decline on 3 November to a stronger dollar and higher Treasury yields, as investors awaited the U.S. midterm election results for clues about fiscal policy.
The council expects opposing forces to continue affecting demand in the fourth quarter, with interest rates, higher yields and a strong dollar potentially weighing on gold investment. By contrast, fiscal concerns, inflation, geopolitical tensions and market pressures could provide support. The council expects investment to remain the main driver of demand growth in 2026 and central-bank demand to remain strong in the fourth quarter. A recovery in bar and coin demand may require an external catalyst or a clear price direction. On the supply side, the council expects a slight decline in the annual total, as weaker recycling could offset the possibility of mine production reaching a new record for the year.