Gold Demand Trends: Q2 2026

In a continuation of our Q1 observations, gold usage in the electronics space very much remained on a two-speed setting: strong AI infrastructure investment offset weakness in smartphone and laptop shipments, primarily due to surging memory costs. High gold prices also continued to accelerate thrifting and substitution in many low- and mid-range applications, adding further pressure to some traditional consumer electronic applications.

Electronics

Gold demand in the electronics sector rose by 4% y/y to 68t in Q2. Demands from AI infrastructure remained the dominant growth engine for high-end electronics, with many manufacturers struggling to keep up with seemingly insatiable appetites for these products. The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), announced a 77% jump in second-quarter net profits to $22bn – making it Asia’s most valuable company – and a $100bn expansion of its production facilities in the US.¹ Other parts of Asia also reported strong growth, with many fabrication facilities in China and South Korea operating at high utilisation rates to keep up with AI infrastructure demand.

In contrast, demand in consumer electronics continued to weaken as memory shortages, rising oil prices and transportation costs all piled pressure on an already struggling sector. For example, IDC, a leading data analytics group, has forecast that 2026 smartphone shipments could experience the steepest annual contraction in history, falling almost 14%.²

The first half of 2026 has seen a clear and ongoing bifurcation of the market, and this is likely to continue for the remainder of the year.

Gold used in wireless and compound semiconductors saw an increase across the board. Rapid WiFi 7 penetration continued alongside robust demand for radio-frequency modules and rising demand for electric vehicle (EV) and AI data centre components. Additionally, a steady expansion in low earth orbit (LEO) satellites and 4D imaging sensors has been reported. These high-end devices require more enhanced electronic component metallisation than many other commercial applications as they need to satisfy elevated thermal and reliability criteria; gold is therefore used as standard.

Gold usage in the LED segment grew slightly during Q2 as a surge in intelligent automotive lighting was reported. The penetration of high-power exterior lighting, particularly in vehicle head and tail lamps, continued to grow across the EV and luxury car segments. Due to the demanding reliability requirements of automotive applications, particularly in high-temperature and high-vibration environments, gold wire and gold-tin bonding materials remain the industry standard. Elsewhere, advanced sensors and high-end wearables continued to support gold demand in the segment. Persistent weakness in the standard consumer backlighting market, however, reinforced the polarised demand trends seen in recent quarters.

Demand for gold used in Printed Circuit Boards (PCBs) also rose, but remained polarised across end-use markets. Precious metal consumption is being driven by premium AI server mainboards, integrated circuit substrates and high-frequency LEO satellite PCBs, while gold for use in standard consumer PCBs is decelerating as surging component costs constrain hardware shipments. Manufacturers continue to identify opportunities to reduce gold usage in response to persistently high prices, although localised precision thrifting, rather than outright substitution, appears to be the preferred option currently. Looking ahead, the outlook for gold demand across the PCB sector remains positive, underpinned by the robust growth of high-end AI and satellite systems.

Gold demand in the memory and semiconductor sectors rose strongly again in Q2, driven by continued growth in AI-related applications. Despite manufacturers prioritising supply into this sector, capacity constraints continued to create shortages of high-end memory chips, contributing to rapid price rises. Traditional wire bonding remained under pressure as manufacturers continue to pursue aggressive thrifting strategies in the face of severe cost pressures, but surging demand from AI-related uses more than offset these declines, driving robust growth across the memory and semiconductor sectors. This structural shift is expected to continue in the coming quarters, providing ongoing support for gold demand.

Other industrial and dentistry

Gold used in other industrial and decorative applications (primarily gold-plated items and jewellery, as well as gold thread used in traditional Indian clothing) fell by 7% to 10t as ongoing high gold prices prompted lower demand. This is the ninth consecutive quarter of y/y losses recorded in this sector. Gold usage in the dental sector also continued to fall, dropping a further 6% to 2t on the back of continued substitution to ceramic alternatives.