Despite record outflows from US gold ETFs in March—a staggering 85 tons that wiped out the 69 tons accumulated earlier in the quarter—global gold demand in Q1 2026 refused to collapse. North American funds posted declines of 16 tons overall, ending a nine-month streak of inflows. Risk-off conditions, elevated positioning, and higher opportunity costs drove the exodus. But here's the thing: the world doesn't revolve around American investors.
US gold ETFs hemorrhaged 85 tons in March, yet global demand held firm—proof that Western selloffs don't dictate the entire market.
Total US gold demand fell to 33 tons in Q1, about one-third of the 10-year quarterly average. Sounds catastrophic until you realize the pullback was driven entirely by ETF reversal, not some fundamental breakdown in demand. US bar and coin investment actually posted year-on-year gains in both volume and value, partially offsetting ETF weakness. The real story was happening elsewhere.
Asian bar and coin demand surged 42% year-on-year, pushing global physical demand to 474 tons—the second-highest quarter on record. China mainland alone saw demand jump 67% to 206.9 tons. Asian funds added 84 tons, supporting global ETF demand of 62 tons despite the US retreat. Strong Asian investment offset Western ETF outflows, plain and simple.
Global investment demand dipped just 5% year-on-year to 536 tons. The combined value of global coins, bars, and ETFs reached $84 billion, up 62% year-on-year. Central banks bought 244 tons net in Q1, marking 17 months of purchases.
Jewellery demand told a predictable story: volumes down, values up. US jewellery volumes fell to a record low in Q1, down 64% in volume but only 44% in value year-on-year. Global jewellery volumes dropped 23% amid high prices, yet global jewellery spend increased 31%. People bought less gold jewelry, but paid more for it.
The US weakness reflects a cyclical pause, not structural breakdown. Higher opportunity costs from a stronger dollar, delayed rate cuts, and profit-taking during price corrections drove outflows. Elevated positioning after six quarters of ETF inflows made the reversal almost inevitable. Gold sold for liquidity amid risk-off moves. Meanwhile, geopolitical tensions and central bank buying kept supporting fundamentals. Dollar strength typically correlates with weaker gold prices as inflationary pressures and currency valuations shift the relative attractiveness of hard assets versus liquid cash positions. Central banks like the Bank of Ghana employ foreign exchange interventions and monetary policy tools to stabilize their currencies against such dollar fluctuations, which can amplify or dampen local gold demand dynamics. Traders monitoring employment data releases from major economies can better anticipate shifts in monetary policy expectations that influence gold's appeal as an alternative store of value.
