Central Banks Bought 289 Tonnes of Gold in Q2. Here's Why

Total gold demand held steady at 1,269 tonnes in Q2 2026, unchanged year-on-year, according to the World Gold Council's Gold Demand Trends report released on 30 July. The flat headline conceals a market pulled in opposite directions: central banks bought a record 289 tonnes for a second quarter while jewellery consumption slumped to its lowest since the pandemic.

First-half demand reached 2,522 tonnes, up 2%, with its value surging to a record US$380 billion. The LBMA gold price averaged US$4,506.29 per ounce, down 8% from Q1's all-time high but 37% above Q2 2025.

Contents

01

Central banks roar back

02

Jewellery volumes sink, spending survives

03

Investment splits by region

04

OTC and the outlook

Central banks roar back

Central bank net purchases hit 289 tonnes, a 62% year-on-year increase and a fivefold jump from the revised Q1 estimate of 57 tonnes. Metals Focus reclassified 187 tonnes of previously reported Q1 central bank demand into OTC and other categories.

Poland led all buyers, adding 51 tonnes to reach 632 tonnes. China added 33 tonnes, bringing holdings to 2,346 tonnes. Uzbekistan, Kazakhstan, Jordan and the Czech National Bank were also notable buyers. Russia was the largest seller at 22 tonnes, while Turkey sold 4 tonnes and cut outstanding swaps from over 80 tonnes to around 60 tonnes. H1 central bank net demand of 345 tonnes was the lowest first half since 2022. The WGC's survey found 89% of respondents expect global reserves to rise, with a record 45% planning to increase their own holdings.

Jewellery volumes sink, spending survives

Global jewellery demand fell 17% to 278 tonnes. China dropped 28% to 50 tonnes and India fell 15% to 75 tonnes. India raised its import duty from 6% to 15% and Prime Minister Modi appealed directly to citizens to avoid buying gold. Yet spending proved resilient: jewellery expenditure rose 14% to US$40 billion in Q2 and 22% to US$86 billion in H1.

Investment splits by region

Investment demand excluding OTC fell to 262 tonnes. Gold ETFs shed 45 tonnes, concentrated in June when investors cut 74 tonnes. North American funds lost 45 tonnes in Q2 and 61 tonnes over H1, their weakest first half since 2013. European ETFs added 16 tonnes, led by UK inflows of 17 tonnes. Asian ETFs added 70 tonnes over H1, a record, but lost 15 tonnes in Q2 as Chinese investors rotated into local equities. Indian funds added 4 tonnes.

Bar and coin investment held steady at 307 tonnes. China remained the largest market at 107 tonnes, with H1 at a record 314 tonnes. India rose 9% to 50 tonnes. Indonesia surged 40% to 15 tonnes, while Australia hit a record low of 1 tonne after 75 basis points of rate hikes. Turkey rose 27% to 19 tonnes.

OTC and the outlook

OTC demand surged 91% to 327 tonnes, bringing H1 to 571 tonnes. Technology demand firmed to 80 tonnes as AI demand offset consumer electronics weakness. Supply was steady at 1,269 tonnes, with mine production up 2% to 965.6 tonnes and recycling down 6% to 326 tonnes. The WGC expects investment to remain the primary demand driver in H2, supported by OTC activity and Asian buying.