Metals Focus projects global gold demand will decline in 2026 despite modest supply growth, with the annual average gold price forecast to surge 43% to a record $4,920. The independent precious metals research consultancy released its Gold Focus 2026 report detailing supply and demand forecasts alongside comprehensive 2025 historical data. The shift reflects double-digit declines in jewelry and central bank purchases offset by increased investor appetite for bars and coins, which will replace jewelry as the largest demand component for the first time. Gold rallied 44% in 2025, its strongest performance since 1980, driven by ongoing US policy uncertainty, persistent dollar concerns, elevated geopolitical risks, and stretched equity valuations.
Gold Price Rallied 44% in 2025, Strongest Performance Since 1980
Gold delivered its best annual performance in 45 years with a 44% rally in 2025, according to Matthew Piggott, Director of Gold and Silver at Metals Focus. Net central bank purchases totaled approximately one-fifth lower than the previous year following three consecutive years exceeding 1,000 tonnes, though the 2025 figure remained significantly above pre-2022 levels. Physical investment in bars and coins surged, with China recording 28% growth and India posting 17% gains.
The report noted that 2026 started with fresh all-time highs before a correction occurred as changing expectations on US policy rates and overbought market conditions triggered a pullback. High oil prices have impacted several key bar and coin markets, though the fundamental drivers from 2025 remain intact.
Global Mine Production Reached 3,817 Tonnes in 2025
Global gold mine production reached another high in 2025, rising 2.0% year-on-year to 3,817 tonnes. The increase was driven by new mines, expansions, and higher artisanal and small-scale gold mining. Global all-in sustaining costs rose 12% year-on-year to $1,552 per ounce, underpinned by higher royalties and inflationary cost pressures.
Metals Focus forecasts mine supply will increase 2.4% year-on-year in 2026 to 3,907 tonnes, with output strengthening in all regions except Oceania and Europe.
Recycling Rose to 13-Year High Despite Record Prices
Global recycling increased 2.8% year-over-year in 2025 to a 13-year high of 1,404 tonnes despite gold prices setting record highs. Europe drove the gains alongside modest increases in most other regions, offsetting notable weakness in South Asia.
Scrap supply is forecast to rise 5.1% year-on-year in 2026, though low near-market stocks and the desire to retain gold as a safe haven will limit gains despite sharply higher prices.
Central Bank Purchases Fell 22% to 848 Tonnes
Net official sector purchases declined 22% year-over-year to a four-year low of 848 tonnes in 2025. Buying was spread geographically as elevated US policy uncertainty encouraged further diversification. Sales were concentrated among a small number of countries, largely reflecting portfolio rebalancing after the price rally.
Metals Focus stated that despite headwinds from the energy shock, net purchases are expected to remain historically high in 2026 as diversification-led drivers persist.
Physical Investment Rose 16% to 12-Year High
Physical investment climbed 16% to a 12-year high in 2025 as strong price gains fueled retail demand. Exchange-traded product holdings increased by 803 tonnes during the year, marking the highest annual inflows since 2020, with gains spread across regions.
Tariff uncertainty, rising US debt, concerns over Federal Reserve independence, and ongoing geopolitical turmoil all enhanced gold's investment appeal, according to the report.
Jewelry Fabrication Declined 19% to Five-Year Low
Global jewelry fabrication fell 19% in 2025 to a five-year low of 1,646 tonnes. Most countries saw losses as high prices dominated the trend, prompting light-weighting, carat shifts, and substitution from gold to platinum and plated or gold-filled jewelry.
The decline is expected to continue in 2026 with a further 11% decrease, leaving fabrication only slightly above pandemic-impacted 2020 levels.
Electronics Demand Remained Unchanged in 2025
Electronics demand was essentially unchanged in 2025, with gains from the burgeoning AI buildout offset by weakening demand for consumer electronics. Decorative and Other Industrial fabrication contracted 4.9% in 2025 to its lowest level since a pandemic-affected 2020.
FAQ
What is the gold price forecast for 2026?
Metals Focus forecasts the annual average gold price will surge 43% to a record $4,920 in 2026.
How much did gold prices rise in 2025?
Gold rallied 44% in 2025, its best annual performance since 1980, according to Metals Focus.
What will be the largest component of gold demand in 2026?
Physical investment in bars and coins will replace jewelry as the largest component of gold demand for the first time in 2026, driven by increased investor appetite in China and India.
