Gold: Demand mix shifts as investment rises – Commerzbank

Commerzbank, citing Metals Focus, notes that total Gold demand is forecast to fall 2% in 2026 as weaker jewelry demand and lower central bank buying offset stronger bar and coin investment. High prices are curbing jewelry purchases, while physical investment is expected to reach its highest level since 2013 and surpass jewelry demand for the first time.

Investment demand offsets weaker jewelry buying

"Metals Focus, a research firm specializing in precious metals, released forecasts yesterday regarding gold demand for this year. Total demand is expected to decline by 2% to 4,177 tons."

"The main factors weighing on demand are weaker jewelry demand, which is projected to fall by 11%, and lower gold purchases by central banks. Jewelry demand is being weighed down by high price levels as well as a shift in demand toward bars and coins."

"As a result, physical investment demand is expected to rise by 15% to its highest level since 2013 and, for the first time since data collection began, exceed jewelry demand."

"Metals Focus cites rising energy prices as the reason for the expected 15% decline in central bank gold purchases, noting that some central banks had to intervene to support their currencies and consequently sell gold."

"Like us, Metals Focus anticipates a resumption of the upward trend in the gold price for the second half of the year."