Global demand for gold is projected to rise by two percent [1] during the first half of 2026, according to the World Gold Council.

This increase reflects a growing trend of investors seeking stability through hard assets as geopolitical instability threatens global markets. The shift toward gold typically signals a lack of confidence in traditional currencies or equities during periods of international conflict.

Andrew Naylor, head of Middle East and Public Policy for the World Gold Council, said the organization expects demand to increase by two percent [1] in the first half of the year. This projection comes as spot gold prices have climbed above $4,050 [2] per ounce.

The surge is largely attributed to rising geopolitical tensions, specifically the escalation between the U.S. and Iran. Market analysts said that investors are increasingly using gold as a hedge against the uncertainty stemming from these diplomatic frictions.

Recent market data indicates a recovery in the metal's value. Gold recently recorded its first monthly gain of more than one percent [2] in five months. This upward movement suggests a renewed appetite for the asset following a period of stagnation.

Beyond investment demand, the jewelry sector continues to show significant activity. Spending on jewelry reached $47 billion [1] in the first quarter, demonstrating that consumer demand remains a pillar of the gold market even as geopolitical hedging drives the price higher.

The World Gold Council's analysis suggests that the intersection of high retail spending and institutional safe-haven buying is creating a strong floor for gold prices.

“"We expect demand for gold to increase by 2% in the first half of 2026,"”

The projected rise in gold demand underscores a broader transition in global portfolio management where geopolitical risk, particularly in the Middle East, outweighs the costs of holding non-yielding assets. When spot prices exceed $4,000 and demand continues to climb, it indicates that the market is pricing in a prolonged period of instability between the U.S. and Iran, effectively treating gold as an insurance policy against systemic diplomatic failure.