WGC Cuts Gold Investment Demand Growth Forecast Amid Slower Retail Buying by Amit Gupta, Kedia Advisory
The World Gold Council (WGC) lowered its forecast for gold investment demand growth in 2026 to 200 metric tons from 400 tons, citing weaker bar and coin purchases. Gold prices have declined 29% from January’s record high of $5,595 per ounce, pressured by rising oil prices and expectations of higher interest rates amid the Iran war. Meanwhile, physically backed gold ETFs attracted 211 tons of inflows in the third quarter. Central bank purchases surged 42% year-on-year to 321 tons, prompting the WGC to raise its forecast and expect 2026 purchases to match or exceed 2025's 848 tons.
Key Highlights
* WGC cuts its 2026 gold investment demand growth forecast to 200 tons from 400 tons.
* Gold prices have declined 29% from January's record high of $5,595 per ounce.
* Gold ETF inflows reached 211 tons in the third quarter despite higher bond yields and a stronger dollar.
* Bar and coin demand declined 19% year-on-year to 268 tons, while jewellery consumption fell 17% to 313 tons.
* Central bank gold purchases surged 42% to 321 tons, the highest quarterly level since Q4 2024.
The World Gold Council (WGC) has lowered its forecast for growth in gold investment demand in 2026 to 200 metric tons from its earlier estimate of 400 tons, citing slowing purchases of bars and coins. Spot gold prices, which touched a one-year low on Friday, have declined 29% from January's record high of $5,595 per ounce. The decline has been driven by rising oil prices amid the Iran war, which have fuelled inflation concerns and strengthened expectations of higher interest rates.
According to the WGC's quarterly demand trends report, gold investment demand has shown mixed performance across different investment categories. Physically backed gold exchange-traded funds (ETFs) recorded inflows of 211 tons during the third quarter, exceeding expectations despite sharply higher bond yields, a stronger US dollar and easing geopolitical tensions. The council noted that fiscal concerns and broader economic uncertainty have partly offset the higher opportunity cost of holding non-yielding gold.
However, retail investment demand weakened, with bar and coin purchases falling 19% year-on-year to 268 tons as investors remained on the sidelines. Jewellery consumption also declined 17% to 313 tons, marking its weakest third quarter since the data series began in 2000. Meanwhile, central bank purchases, including reported and estimated buying, increased 42% to 321 tons, the highest quarterly total since the fourth quarter of 2024. Poland and China led officially reported purchases.
The increase in central bank buying lifted year-to-date net purchases to 675 tons, prompting the WGC to raise its 2026 forecast. It now expects central banks to purchase at least 848 tons, matching the total recorded in 2025. The council also highlighted the US midterm elections as an additional source of market uncertainty.
Despite weaker retail investment and jewellery demand, sustained central bank buying and ETF inflows could provide underlying support to gold amid broader economic and fiscal uncertainty.
Above views are of the author and not of the website kindly read disclaimer
