International gold prices have experienced significant fluctuations recently, leading some market participants to question whether gold has lost its role as a safe-haven asset. However, this view is not accurate, according to Wang Lixin, CEO of the World Gold Council in China. In an interview on April 29, Wang stated that volatility in gold prices caused by escalating tensions in the Middle East does not alter gold’s fundamental function as a protective asset.
Jia Shuchang, Head of Asia-Pacific (ex-India) Research and Deputy Director of Industry Expansion for China at the World Gold Council, echoed this perspective, noting that the underlying pricing logic for gold remains unchanged. Historically, gold’s volatility tends to revert to its mean, and periods of sharp increases in volatility are often followed by a relatively swift return to normal levels.
Data from the World Gold Council’s Q1 2026 Global Gold Demand Trends Report, released on the same day, showed that total global gold demand, including over-the-counter transactions, reached 1,231 metric tons in the first quarter, a 2% increase year-on-year. Although the growth in demand volume was modest, the total value of demand surged to a record $193 billion, up 74% compared to the same period last year.
Demand for gold bars and coins in China soared 67% year-on-year to 207 metric tons, setting a new quarterly record. Other Asian markets, including India, South Korea, and Japan, also saw increased demand for bars and coins. The United States and Europe experienced strong growth as well, with demand rising by 14% and 50%, respectively.
Additionally, global physical gold ETFs maintained net inflows during the quarter, with total holdings increasing by 62 metric tons. Asian investors purchased 84 tons, while holdings in European and American markets declined slightly. Net outflows from Western markets in March reversed the strong inflows seen at the beginning of the year.
Central banks continued to support overall gold demand, adding 244 tons to global reserves in the first quarter. Although a few official institutions, including Turkey, Russia, and the State Oil Fund of Azerbaijan, increased their gold sales, central bank purchases remained above both the previous quarter’s level and the five-year average. This further underscores gold’s unique role as a core reserve asset for central banks, particularly due to its strong liquidity during periods of extreme market turbulence.
The World Gold Council highlighted that strong gold price performance and rising safe-haven demand drove global bar and coin investment up 42% year-on-year to 474 tons, contributing to ongoing structural shifts in global gold demand patterns.
Looking ahead, the Council expects geopolitical risk premiums to continue supporting gold investment demand. However, if interest rates remain elevated for an extended period, investor interest in gold—particularly in Western markets—may weaken. While high gold prices are likely to suppress jewelry consumption volume, spending in this category is expected to remain resilient. On the supply side, gold mine production is projected to grow modestly, though potential energy shortages could temper this outlook.
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