For the first time on record, physical gold investment is projected to surpass jewelry as the primary driver of global gold demand in 2026, according to a new report from Metals Focus. This structural shift signals a fundamental change in gold consumption patterns that jewelry supply-chain buyers — from manufacturers to wholesalers — must monitor closely as it reshapes pricing, sourcing strategies, and consumer behavior across key markets.
Demand shift and jewelry sector impact
Metals Focus reported that global jewelry demand fell 19% last year as record-high gold prices and geopolitical uncertainty curbed consumer spending. The consultancy expects double-digit losses for the jewelry sector to continue through 2026. This sustained decline means jewelry manufacturers and OEM/ODM suppliers may face prolonged pressure on order volumes, especially for high-carat gold pieces.
Investment demand surge and price outlook
Physical gold investment is forecast to rise 15% this year to its highest level since 2013, with China leading the growth. Retail investors are shifting from ornamentation to bars and coins. Gold reached an all-time high of $5,595 per troy ounce in January. Although prices have since retreated 20%, Metals Focus anticipates a second-half rally and forecasts an average price of $4,920 per ounce for 2026 — a 43% increase over 2025.
Central bank dynamics and market implications
Central bank demand is projected to decline as some nations sell gold reserves to stabilize local currencies amid rising energy costs and inflationary pressures. This shift could add further volatility to gold prices. For jewelry importers and distributors, higher and more volatile gold prices may compress margins on gold-based products and accelerate demand for alternative materials such as sterling silver, stainless steel, or gold-plated brass.
What buyers should watch
Jewelry buyers should monitor gold price trends closely when planning inventory and pricing strategies. The sustained shift toward investment demand may reduce consumer willingness to pay high premiums on gold jewelry, particularly in price-sensitive markets. Consider diversifying product mix with lower-carat gold, silver, or fashion jewelry lines to hedge against gold price volatility. Also watch for changes in Chinese consumer behavior, as China leads the investment surge and remains a critical market for jewelry exports.
Source: Read the original report | Published: June 05, 2026