The World Gold Council's latest report shows that with gold prices retreating from record highs, the global gold market demonstrated overall resilience in the second quarter of 2026, with total demand remaining flat year-on-year and first-half demand value setting a new historical record. Meanwhile, the demand structure continued to diverge, as central bank purchases rebounded strongly while jewelry consumption fell to pandemic-era lows.

According to the World Gold Council's 2026 Second Quarter Global Gold Demand Trends Report released on July 30, global gold demand (including over-the-counter trading) in the second quarter was flat year-on-year at 1,269 tons. Cumulative first-half demand reached 2,522 tons, up 2% year-on-year, with a total demand value of $380 billion, a new all-time high. Global central banks made net purchases of 289 tons in the second quarter, a 62% increase year-on-year, marking the highest quarterly purchase volume in nearly four years.

In terms of demand structure, weakening gold prices led to a net outflow of 45 tons from gold ETFs in the second quarter, becoming the main drag on investment demand. However, robust over-the-counter investment and continued central bank accumulation collectively supported overall demand. Jewelry demand faced dual pressures, with global jewelry demand falling to 278 tons in the second quarter, the lowest quarterly level since the pandemic.

Looking ahead to the second half, the World Gold Council believes that investment demand is expected to become a key driver, but the demand structure may continue to shift toward Asian markets and over-the-counter trading.

Central Bank Gold Purchases Return Strongly, People's Bank of China Sets Record for Continuous Accumulation

Global central bank gold purchases rebounded significantly in the second quarter, becoming the most prominent highlight on the demand side this quarter. After a noticeable slowdown in first-quarter purchasing activity, global central bank net purchases reached 289 tons in the second quarter, up 62% year-on-year, with purchases from several countries increasing, pushing the buying scale to its highest level in four years.

The People's Bank of China was among the most active buyers. Following an increase of 7 tons in the first quarter, the bank accelerated its purchasing pace in the second quarter, accumulating 33 tons, the largest quarterly purchase since the fourth quarter of 2023. It has now purchased gold for 20 consecutive months, setting a record for the longest continuous accumulation period. As of the end of June, China's official gold reserves stood at 2,346 tons, accounting for 8% of total foreign exchange reserves.

A survey by the World Gold Council also showed that 45% of respondent central banks expect to increase their gold reserves in the coming year. However, weighed down by first-quarter data, total central bank purchases in the first half remained slightly below recent highs. Looking ahead, the World Gold Council expects global central banks to remain significant gold buyers, though the pace of purchases may be somewhat slower than in the past four years.

ETF Flows Follow Gold Price Volatility, Over-the-Counter Trading and Asian Markets Step In for Support

Gold ETFs faced significant pressure in the second quarter. Global gold ETFs saw a net outflow of 45 tons, a key factor in the decline in investment demand. North America led the outflows, as rising inflation and interest rate expectations, coupled with a stronger U.S. dollar, exacerbated net outflows in the region. Despite this, global gold ETFs still recorded a modest net inflow of 18 tons in the first half.

The trend for China's ETF market largely mirrored the global pattern. After a record-breaking first-quarter performance, Chinese gold ETFs experienced substantial net outflows in the second quarter, totaling approximately 200 billion yuan (about $29 billion). Fund outflows, combined with falling gold prices, drove a 20% decline in Chinese gold ETF assets under management to 2,431 billion yuan, with total holdings dropping by 22 tons to 277 tons. Behind the capital outflows, the strong performance of the domestic stock market, particularly in technology stocks, attracted investor attention, and weakening gold price momentum reduced domestic investors' willingness to allocate funds.

In contrast, over-the-counter investment remained robust, driven by the Asian region. Second-quarter over-the-counter investment reached 327 tons, with a first-half total of 571 tons. Global demand for gold bars and coins was roughly flat year-on-year at 307 tons, but supported by strong first-quarter performance, first-half total demand for gold bars and coins was 21% higher than the same period last year.

Looking ahead, the World Gold Council believes that Western market interest in gold ETFs will be more closely tied to U.S. Treasury real yields, U.S. monetary policy expectations, and the dollar's trajectory, while over-the-counter activity and Asian investment demand are expected to play an increasingly significant role.

China's Gold Bar and Coin Demand Hits Record High in First Half, Investment Logic Remains Solid

Gold bar and coin investment in China continued to show structural strength in the second quarter. Second-quarter demand for gold bars and coins in China reached 107 tons, a modest 7% year-on-year decline, but still significantly above the ten-year average of 60 tons. On a monthly basis, April continued the strong momentum from earlier in the year, while May saw some investors pause purchases due to sharp gold price volatility. In June, bargain buying rebounded as gold prices corrected from highs.

In the first half, Chinese gold bar and coin demand surged 31% year-on-year to 314 tons, marking the strongest half-year performance on record. Core factors supporting demand included investment enthusiasm driven by gold hitting record highs early in the year, ongoing geopolitical and economic uncertainty, declining domestic government bond yields, and the signaling effect of the People's Bank of China's continued gold purchases.

Additionally, the VAT policy adjustment in November last year had essentially no negative impact on the investment sector, as most investment-oriented gold products remained exempt from VAT. Some consumers who previously purchased jewelry for investment purposes are increasingly shifting to physical gold products. The World Gold Council expects China's gold investment demand to remain relatively strong in the second half, with the supporting fundamentals largely unchanged for the remainder of the year. However, periodic gold price fluctuations could lead to short-term volatility in purchase volumes.

Jewelry Demand Hits Multi-Year Low, but Consumption Expenditure Remains Resilient

In the jewelry sector, global demand fell to 278 tons in the second quarter, the lowest quarterly level since the pandemic, down 17% year-on-year. In terms of value, global jewelry consumption rose 14% year-on-year to $40 billion.

Second-quarter jewelry demand in China stood at 50 tons, down 28% year-on-year, marking the weakest second-quarter performance since 2005 and a sharp 41% decline quarter-on-quarter. First-half jewelry demand in China fell 30% year-on-year to 136 tons, 52% below the ten-year average for the first half. High and volatile gold prices further prompted consumers to delay purchases or opt for trade-ins, while investment-oriented demand continued to shift toward gold bars and coins.

However, resilience was evident in expenditure terms. Second-quarter jewelry consumption value in China was 49.6 billion yuan, only 7% lower year-on-year and 10% above the ten-year average of 44.9 billion yuan. First-half total jewelry consumption in China reached 141.9 billion yuan, up 2% year-on-year, making it the second-strongest first-half performance on record. Market divergence intensified, with lightweight hardened gold products and high-end ancient gold series continuing to lead, while industry consolidation extended into upstream manufacturing.

The World Gold Council believes that jewelry demand in the second half may receive seasonal support from the wedding peak season and holidays, but weak consumer confidence and high jewelry costs will continue to exert pressure. The current structural contraction in jewelry store networks and manufacturing capacity is unlikely to end in the short term.

Technology Use of Gold Sees Modest Growth, Supply Side Trends Differ for Mining and Recycled Gold

In the technology sector, driven by demand related to artificial intelligence, global technology use of gold rose slightly to 80 tons in the second quarter, successfully offsetting the drag from a weak consumer electronics market.

On the supply side, total global gold supply in the second quarter was flat year-on-year at 1,269 tons, but internal structure diverged. Supported by new production from Canada and Chile, mine supply increased by about 2% year-on-year to 966 tons. On the other hand, despite persistently high gold prices, recycled gold supply fell 6% year-on-year, confirming consumer behavior favoring holding rather than selling gold. The World Gold Council expects this trend to continue in the second half, with little sign of growth in recycled gold supply.