According to the World Gold Council’s recently published Gold Demand Trends for Q1 2026, global gold demand, at 1,231 tonnes, rose by just 2 per cent compared to the same quarter last year. Compared to the fourth quarter of 2025, gold demand has dropped by 6 per cent. This is due to the high gold price, up 70 per cent compared to the same quarter last year, and inflationary concerns triggered by the blockade of the Strait of Hormuz, which affect the greater economy and private households alike. Consequently, the decline in gold demand in the jewellery industry is particularly steep at 23 per cent. Demand has also decreased across most areas of the technology sector. The sole exception: gold requirements relating to artificial intelligence.
AI development and infrastructure require high-end technology
Due to the steady rise of the gold price in recent years, companies which primarily manufacture cost-sensitive consumer electronics and communication devices seek to replace the precious metal with less costly components wherever possible. However, the technical requirements for AI-related technologies are extremely high, rendering the use of gold indispensable. This applies, above all, to high-performance components, where the unique conductivity and corrosion resistance of gold are indispensable. Consequently, the first quarter of 2026 saw gold demand in the electronics sector rise threefold year-on-year compared to the tech sector overall.
Global gold price reached record high in first quarter of 2026
Although the gold price in US dollars has thus far risen only by a moderate 6.57 per cent in 2026, the price jumps of 26.25 per cent in 2024 and 66.47 per cent last year have propelled the value of gold to an all-time high in the first quarter of 2026. Hence the decline in demand for gold across all price-sensitive sectors, as well as in gold-backed ETFs and ETCs. The latter have experienced a significant sell-off since March 2026, primarily by professional investors looking to take profits or secure their own liquidity.