Jakarta. Gold is expected to remain one of Indonesia’s strongest-performing assets in 2026 as geopolitical tensions, rupiah volatility and inflation concerns continue to drive investor demand, according to the World Gold Council.

The council said Bank Indonesia added two tons of gold to its reserves, signaling continued confidence among central banks in gold as a safe-haven asset during periods of global uncertainty.

Shaokai Fan, Head of Asia-Pacific excluding China and Global Head of Central Banks at the World Gold Council, said Indonesia posted one of its strongest quarters ever for physical gold investment demand.

“Indonesia had a very strong first quarter in terms of bar and coin demand, up 47% year-on-year to 23.6 tons,” Shaokai said during a teleconference on Wednesday. “It was one of the strongest quarters we’ve ever seen for Indonesia.”

Demand for gold bars and coins also nearly doubled from the previous quarter, reflecting growing investor demand for safe-haven assets amid market volatility and inflation risks.

Marissa Salim, Senior Research Lead for Asia-Pacific at the World Gold Council, said gold has continued to outperform many traditional assets in Indonesia.

“In 2025, gold denominated in rupiah outperformed most global and domestic equities and bonds,” Marissa said. “Following stock market panic in the first quarter, gold prices remained resilient and closed the quarter up 14% in rupiah terms, while local equities fell 13%.”

The World Gold Council said gold has delivered average annual returns of around 15% in rupiah terms over the past two decades, making it a consistent long-term investment asset for Indonesian investors.

According to the council’s analysis, allocating between 2.5% and 10% of gold in Indonesian portfolios could improve risk-adjusted returns and reduce concentration risk.

Gold has also historically acted as a hedge during periods of rupiah depreciation and financial stress. During the 1997–1998 Asian financial crisis, the rupiah lost around 80% of its value, while gold helped preserve purchasing power for Indonesian investors.

“Gold became one of the main asset classes when other instruments failed to provide protection,” Marissa said.

The council added that similar patterns were seen during the 2008 global financial crisis, the Covid-19 pandemic in 2020, the Federal Reserve’s rate shock in 2022, and market volatility in 2026.

Indonesia is also entering a new phase in gold market development. The government launched the Bullion Ecosystem Development and Strengthening Roadmap 2026–2031 in March, while the Financial Services Authority (OJK) is developing regulations for gold-backed exchange-traded funds (ETFs).

Under OJK Regulation No. 5/2023, insurers and reinsurers are now allowed to allocate up to 10% of their investment portfolios to gold. The framework was later expanded through Regulation No. 2/2026, which covers physical gold ETFs and is expected to pave the way for broader institutional investment.

The World Gold Council expects Indonesia’s first physical gold ETF to launch by mid-2026.