Gold demand steadies in Q2 2026 as central bank buying offsets ETF outflows
Gold demand held at 1,269 tonnes in Q2 2026 and rose 2% in the first half to 2,522 tonnes, as central bank purchases and OTC investment offset ETF outflows, WGC reports globally.
Global gold demand held steady in the second quarter of 2026, according to the World Gold Council’s latest Demand Trends report, with gold demand the focal point as markets adjusted from record early-year prices.
Total demand for the first half rose 2% year-on-year to about 2,522 tonnes, with a combined value near $380 billion, reflecting a shift in the mix of buyers rather than a surge in overall consumption.
The report highlights divergent flows across investment channels, sustained central bank buying and continued activity in over-the-counter markets, underscoring gold’s enduring role in portfolios and official reserves.
Global gold demand stabilises at 1,269 tonnes in Q2
The World Gold Council recorded total demand of 1,269 tonnes in Q2, effectively matching the same quarter a year earlier even as prices eased from their early-2026 peaks.
Analysts say the price correction after record highs helped restore some investor appetite, contributing to the modest rise in aggregate demand for the first half of the year.
Despite the stronger Q2, the WGC noted overall H1 demand remained below the heightened levels seen in recent years because of weak first-quarter activity.
ETFs and bullion see reduced investor flows
Investment into gold exchange-traded funds and physical bars and coins moderated in the second quarter, with ETF and bullion investment amounting to 262 tonnes during the quarter.
That figure reflects a pullback from the robust inflows observed at the start of 2026, and ETFs recorded net outflows of 45 tonnes in Q2 even though the cumulative ETF position for H1 stayed marginally positive at 18 tonnes.
This shift signals that while some investors took profits as prices corrected, other channels and regions continued to absorb supply.
OTC trading and Asian demand underpin volumes
Demand in the over-the-counter (OTC) market rose to 327 tonnes in the quarter, driven in part by heightened activity across Asian markets, lifting OTC purchases to 571 tonnes for the first half.
Traders and regional investors increasingly turned to OTC venues for liquidity and tailored transactions, helping offset weaker flows into ETFs.
The WGC highlighted that sustained Asian investment interest remains a central element supporting global gold demand dynamics.
Central banks step up reserve accumulation
Official institutions significantly increased their net purchases, adding 289 tonnes to reserves in Q2 — a 62% year-on-year jump — as multiple central banks resumed or accelerated buying.
These official purchases provided a robust source of demand during the quarter and contributed materially to the H1 increase, reinforcing gold’s position as a strategic reserve asset.
A WGC survey of central bank reserve managers showed that 45% of respondents expect to raise gold holdings over the coming 12 months, pointing to continued official sector interest.
Jewellery demand falls in volume but rises in value
High gold prices weighed on consumer jewellery purchases in Q2, with jewellery demand down 17% in volume year-on-year as buyers opted for lighter, more budget-conscious pieces.
However, the total value of jewellery demand rose, climbing 22% to approximately $86 billion globally for the first half, reflecting higher average prices per gram despite smaller physical volumes.
The divergence between volume and value underlines how price levels can suppress physical offtake while still boosting the monetary worth of sales.
Supply picture: mines increase, recycling declines
On the supply side, total global supply remained steady at 1,269 tonnes in Q2, as a roughly 2% rise in mine production offset weaker recycling volumes.
Mine output rose to 966 tonnes year-on-year, aided by new production from projects in Canada and Chile, while recycling fell by about 6% despite elevated price levels.
The balance between higher mined supply and reduced recycled volumes helped keep overall availability stable during the quarter.
Market analysts at the World Gold Council noted that, following the early-year price spike and subsequent correction, underlying fundamentals remained supportive for gold.
WGC’s chief markets analyst, Louise Street, observed that while ETF flows cooled alongside the price pullback, the combination of central bank purchases and buoyant OTC investment underpinned total demand growth in the first half.
Street suggested that investment will likely remain the primary driver of demand through the remainder of 2026, although the composition of that demand may continue to evolve as markets react to macroeconomic and price developments.
The mid‑year picture for gold demand shows a market adapting to shifting investor preferences and official sector strategies, with central bank accumulation and regional OTC activity offsetting softer ETF flows and reduced jewellery volumes.
For policymakers and investors in the UAE and the wider Gulf region, these trends reinforce gold’s dual role as a reserve asset and a portfolio diversifier amid changing price dynamics and global economic uncertainty.