Surge in gold demand calls for stronger African production and processing capabilities

In a rallying cry to the continent’s miners, the latest report from the World Gold Council has unveiled that demand for gold is soaring to unprecedented levels. On Wednesday, April 29, the Q1 2026 Gold Demand Trends report documented a 2% year-on-year increase in total quarterly gold demand, reaching 1,231 tonnes. But while the volume increase is modest, the value has skyrocketed, hitting a record US$193 billion, up a staggering 74% compared to the previous year.

China, the world’s largest gold consumer, demonstrated an impressive 67% boost in demand, bringing its total to a historic 207 tonnes, significantly surpassing its previous high of 155 tonnes set in Q2’13. This growth wasn’t confined to China alone; other Eastern markets such as India, South Korea, and Japan also reported increased bar and coin buying, signalling a profound structural shift in global gold demand. The demand for gold bars and coins surged in the US and Europe, up by 14% and 50% respectively, reinforcing the notion that investors are increasingly interested in purchasing processed gold.

Unfortunately, the prominent African gold producers, most notably Ghana and Mali, were notably absent from the latest demand highlights. The implication is clear: Africa must transition towards not only producing gold but also processing it effectively to tap into these expanding global markets. Yes, Ghana and South Africa are already processing gold, but analysts warn that the continent risks losing out on lucrative opportunities without bolstering its processing capabilities.

Interestingly, the jewellery market, traditionally a stronghold for gold consumption, saw a notable decline. Demand for gold jewellery plummeted by 23% year-on-year to 300 tonnes, largely in response to surging prices. Declines were particularly severe in key markets such as China (-32%), India (-19%), and the Middle East (-23%). Nevertheless, despite this drop in demand, the value of jewellery purchases rose. This suggests that consumers remain committed to spending on gold, viewing jewellery increasingly as an investment rather than a mere adornment. Trends indicate that jewellery purchases may have transferred into bar and coin investments, especially in China and India.

“Gold’s volatility has markedly increased in 2026, with prices peaking above US$5,400 per ounce in January before a controlled correction,” explains Louise Street, Senior Markets Analyst at the World Gold Council. “The combination of price momentum and heightened geopolitical risks has propelled investment demand, particularly in Asia, as investors seek the security offered by physical gold.”

On the supply side, the total gold supply also recorded a 2% year-on-year increase, plateauing at 1,231 tonnes. With mine production reaching a new first-quarter record and recycling up modestly by 5%, market conditions remain tight despite the elevated prices. The data suggests a muted supply response from existing operations, which could heighten the pressure on producers to innovate and expand output.

As the global landscape for gold continues to evolve, the message for Africa’s mining sector is clear: embrace the opportunity, enhance processing capabilities, and ensure that the continent can fully capitalise on this flourishing market.