Gold demand, including over-the-counter (OTC) demand, increased by 2% year-on-year to 1 231 t for the quarter ended March 31, mainly as a result of higher bar and coin demand, the World Gold Council (WGC) reports in its latest ‘Gold Demand Trends’ report.

The council points out that the price of gold hit a record high of $5 400/oz in January, before undergoing a correction and decreasing by 6% by the end of the quarter.

The supply of gold also increased by 2% year-on-year in the first quarter to 1 231 t, on the back of 2% year-on-year growth in mine production to 885 t and a 5% year-on-year uptick in recycling volumes to 366 t.

“This modest growth in volumes, combined with gold’s exceptional rise, generated a 74% jump in the value of quarterly demand to a record $193-billion,” notes WGC senior markets analyst Louise Street.

Bar and coin demand reached 474 t in the first quarter, up 42% year-on-year and representing the second-highest quarterly level on record, with Asian investors driving demand for gold investment products.

Explosive growth in Chinese bar and coin demand resulted in the strongest quarter ever in that country, with demand soaring to 207 t, breaking the record of 155 t set in the second quarter of 2013.

Further, gold-backed exchange-traded fund (ETF) inflows persisted during the first quarter, increasing by 62 t, although at a slower pace than the strong 2025 first quarter, which saw inflows of 230 t.

US-listed funds recorded notable outflows in March this year.

Meanwhile, despite record-high gold prices, jewellery demand volumes declined by 23% year-on-year. Total spending, however, rose by 31%, indicating a sustained positive sentiment towards gold jewellery, WGC Europe, Middle East and Africa senior analyst Krishan Gopaul points out.

The council notes that investment demand now far exceeds fabrication given the prevalence of weaker jewellery demand alongside growing investor interest in gold, which has changed the composition of demand in recent years.

Central banks recorded net gold purchases of 244 t in the first quarter, marking a 3% year-on-year increase, despite a noiticeable rise in selling activity over this period, and the demand for gold used in technology edged 1% higher to 82 t, fuelled largely by the continued growth in AI infrastructure.

Notably, geopolitics remains at the forefront of the council’s outlook for gold demand this year. The WGC expects investment and central bank demand to be supported by ongoing geopolitical risk, as well as further impetus from elevated inflation and persistent high gold prices.

The council adds that jewellery demand will remain under pressure for similar reasons, but says spending will likely remain resilient.

The WGC also highlights that government bond yields are likely to stay elevated until a clearer path for policy rates emerges as central banks grapple with supply shocks from the US-Israel-Iran conflict, adding that the geopolitical risk premium that has helped lift gold over the past few years is set to continue and possibly expand as the year progresses.