The World Gold Council cut its forecast for growth in gold investment this year to 200 metric tons from 400 tons previously, citing weaker appetite for bars and coins, although it raised its estimate for central bank purchases.
Spot gold prices, which hit a one-year low late last week, have fallen 29% since reaching a record high of US$5,595 (S$7,138) an ounce in January as the Iran war boosted oil prices and fueled expectations of higher interest rates.
“While demand from gold ETFs has exceeded expectations, bar and coin demand, although still relatively resilient, slowed notably in the second half of 2026,” the WGC said in its quarterly demand trends report earlier this week.
Physically backed gold exchange-traded funds recorded inflows of 211 tons in the third quarter despite sharply higher bond yields, a stronger dollar and easing geopolitical tensions. “This suggests that fiscal concerns and broader uncertainty have partly offset the higher opportunity cost of holding gold,” the WGC said.
Tuesday’s US midterm elections add another source of uncertainty, it said, adding that an increase in Democratic control could be supportive of gold, although both the policy consequences and market reaction remain uncertain.
In contrast to ETF demand, bar and coin demand dropped 19% year-on-year to 268 tons as retail investors stayed on the sidelines, while jewellery consumption fell 17% to 313 tons, the weakest third quarter since the data series began in 2000.
Meanwhile, central bank purchases, including reported and estimated buying, rose 42% to 321 tons, the highest quarterly total since the fourth quarter of 2024.
Poland and China led officially reported purchases. This buying lifted year-to-date net purchases to 675 tons, prompting the WGC to raise its 2026 central bank demand forecast. It now expects purchases to at least match the 848 tons bought in 2025.
“It’s possible that we get a higher full-year total for central banks this year compared to last year,” said Krishan Gopaul, WGC senior EMEA analyst. REUTERS
