Gold Demand to Remain Strong as Investors Reassess Risk, WGC Says — Update

By Giulia Petroni

Global demand for gold is expected to remain strong this year, driven by lower interest rates, uncertainty in bond markets and persistent geopolitical risks, the World Gold Council said after bullion crossed the $5,000 mark for the first time.

"Gold's appeal as an all-weather hedge relative to fixed income should continue to attract material investor demand into 2026, and possibly beyond," the trade group said Thursday in its quarterly report.

Investors across major economies are increasingly concerned about stressed global economic conditions and fiat currencies. That is pushing them to rethink risk, diversification, and wealth preservation. As a result, gold is gaining renewed attention as a hedge and is being more seriously considered and allocated within portfolios.

"Investors around major nations are having questions and concerns around their economic conditions," said Joseph Cavatoni, senior market strategist at the WGC. "I think that's what's helping all the other factors that we know...political tensions, geopolitical tensions, trade relations."

The precious metal has smashed records over the past year, bolstered by central-bank buying and strong inflows into exchange-traded funds as investors shy away from sovereign bonds and currencies in favor of hard assets.

Gold futures in New York climbed above $5,500 a troy ounce on Thursday, driven by a weaker U.S. dollar and expectations that the next Federal Reserve chair will favor additional monetary easing. Last year, gold gained nearly 65%--its strongest annual performance since 1979.

The rally has prompted major banks to lift their price forecasts. Societe Generale and Deutsche Bank said gold could reach $6,000 an ounce this year. Morgan Stanley expects prices to climb to $5,700 an ounce in the second half, while Goldman Sachs forecasts $5,400 in December.

The WGC anticipates another year of continued central-bank purchases, strong exchange-traded fund inflows, and solid bar and coin demand due to persistent economic and geopolitical uncertainty.

Mine supply and gold recycling are expected to be broadly in line with last year's levels, with high margins encouraging production. Jewelry spending should hold up, but higher prices will limit the amount buyers can purchase.

Global demand for gold accelerated in the fourth quarter of last year, reaching 1,303 tons on hefty ETF inflows and bar and coin buying hitting a 12-year high. Total gold demand in 2025--including over-the-counter transactions--exceeded 5,000 tons for the first time, according to the WGC.

Holdings of gold-backed ETFs surged to an all-time high last year, while central-bank purchases picked up in the fourth quarter. Still, higher valuations appeared to encourage a more cautious pace of buying, underscoring that central banks remain sensitive to price levels even as their long-term strategic interest in gold remains intact.

"I think it is important that central banks are pretty savvy around where their entry point is," said Cavatoni. "If they're running up against the 22% price increase year-to-date, they may pull down their buying programs to see if they can buy a dip, or they can buy when prices stabilize."

Jewelry demand volumes instead declined across all major markets, reflecting the impact of high prices. "When things get expensive, it's not a surprise for us to see tonnage down, particularly in India and China," according to the strategist.

In those markets, however, gold jewelry continues to function as a form of savings. The slowdown is more visible on the fabrication and jeweler side, where high prices have made retailers more cautious about holding large inventories, leading them to scale back upfront purchases.

"The dollar value is still there, so we're not concerned about the jewelry space just yet," Cavatoni said.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

January 29, 2026 04:03 ET (09:03 GMT)