Gold demand is projected to decline 2% in 2026 according to a new forecast from Metals Focus cited by Commerzbank, marking a shift in who is buying the precious metal and why. The anticipated drop reflects weakening appetite from two major market segments: jewelry purchases are expected to soften while central bank gold acquisitions slow from recent elevated levels. However, this decline will be partially cushioned by strengthening retail investment demand through bars and coins as individual investors increase their physical gold holdings.
The changing demand composition signals a transition from institutional and luxury buyers toward defensive retail positioning. Traders should monitor whether price volatility accompanies this rebalancing, as retail flows tend to be more price-sensitive than central bank accumulation programs. The slowdown in official sector buying particularly warrants attention given central banks have been significant marginal buyers supporting prices over the past two years.
FXnCO Insight
Watch for increased gold price sensitivity to retail investor sentiment and dollar strength as the demand base shifts away from steadier institutional buyers toward more reactive individual investors.
Source: FXStreet