Gold Demand Plummets Amidst Middle East Tensions, Record High Prices Falter. JOHANNESBURG, South Africa – In a surprising turn of events, global gold demand has seen a dramatic 73% decline in the first quarter of 2026, coinciding with the escalation of the Middle East conflict.
The World Gold Council attributes this significant drop to a surge in outflows from gold ETFs in March, which erased earlier gains.
The demand for gold jewelry also took a hit, falling by 23% year on year, marking the lowest level in five years. This decline was primarily driven by weaker consumption in key markets like China and India. Despite these developments, demand for gold bars and coins rose by 42%, indicating a shift among retail investors towards physical gold as a long-term safe haven.
Amidst these trends, gold prices have experienced a sharp downturn, as concerns over higher inflation have led to speculation that central banks may raise interest rates. This has had a notable impact on mining stocks, with major South African producers such as AngloGold Ashanti and Gold Fields witnessing a 18% drop, while Harmony Gold’s shares fell nearly 30%. Central banks have been selling gold to bolster liquidity, further contributing to the downward pressure on prices.
The World Gold Council predicts that uncertainty and high bond yields may continue to dampen demand for gold.
The geopolitical tensions in the Middle East have played a pivotal role in shaping investor sentiment, casting doubt on gold’s traditional role as a stable investment. Despite central banks’continued accumulation of gold, indicating a long-term bullish outlook, the short-term market dynamics remain volatile, influenced by geopolitical and economic factors.
As the Middle East conflict continues to unsettle markets, the future of gold as a safe investment remains uncertain.
The interplay of geopolitical events, economic stability, and investor sentiment will likely determine the trajectory of gold demand in the coming months.
*Additional reporting by ImNews | Sources consulted: 5*
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This original article was produced by the ImNews editorial team
Source: enca
Source: Estelle.Bronkhorst
