Physical gold investment is on track to surpass jewelry as the primary driver of global gold demand for the first time on record, according to a new report from Metals Focus. The shift signals a structural change in the gold market that jewelry buyers, OEM/ODM suppliers, and sourcing professionals should monitor closely, as it may affect raw material pricing, consumer preferences, and supply-chain strategies for gold-based jewelry products.
Demand shift and jewelry sector impact
Global jewelry demand fell 19% last year as record-high gold prices and geopolitical uncertainty curbed consumer spending. Metals Focus expects double-digit losses for the jewelry sector to continue through 2026. Meanwhile, physical gold investment is projected to rise 15% this year to its highest level since 2013, with China leading the growth. This divergence means jewelry manufacturers and importers may face sustained pressure from both elevated metal costs and shifting consumer priorities.
Price outlook and market volatility
Gold reached an all-time high of $5,595 per troy ounce in January before retreating 20%. Metals Focus forecasts a second-half rally, with an average price of $4,920 per ounce for the full year — a 43% increase over 2025. Such volatility creates challenges for jewelry brands and private-label buyers who must manage inventory costs and pricing strategies. Sterling silver and gold-plated brass alternatives may become more attractive for budget-conscious consumers.
What buyers should watch
Importers and distributors of gold jewelry should track the divergence between investment and jewelry demand. If physical investment continues to absorb supply, gold prices may remain elevated, squeezing margins for jewelry makers. Consider hedging strategies, exploring alternative materials like stainless steel or titanium, or adjusting product mixes toward lower-carat or plated items. Central bank demand is expected to fall as some nations sell reserves to stabilize currencies, which could partially offset price pressure.
China sourcing context
China is the leading driver of physical gold investment growth, which may reduce domestic demand for gold jewelry and affect sourcing dynamics for overseas buyers. Chinese OEM/ODM suppliers may pivot toward investment-oriented products or seek export markets for jewelry. Buyers should monitor shifts in Chinese consumer behavior and factory output to anticipate changes in availability and pricing of gold jewelry from the region.
Source: Read the original report | Published: June 05, 2026