Central bank purchases hit record Q2 level
The World Gold Council's Q2 2026 Gold Demand Trends report, published on 30 July and detailed in coverage dated 2 August, showed total gold demand essentially flat year-on-year at 1,269 tonnes, with the headline masking a sharp sectoral rotation. Central banks and other official institutions added a net 289 tonnes to reserves during the quarter, the strongest second quarter on record and up 62% from the 177.9 tonnes purchased a year earlier. Despite the surge, first-half official-sector buying of 345.5 tonnes was the weakest first half since 2022, reflecting an unusually quiet revised first quarter of just 56.5 tonnes. Poland led the quarter with 51 tonnes, followed by China at 33 tonnes, with Uzbekistan, Kazakhstan, Jordan, the Czech Republic, Ghana, Singapore, the UAE, and Kyrgyzstan adding smaller amounts. Russia was the largest seller at 22 tonnes, with Turkey and Germany also reducing positions.
Jewellery volumes weaken but value rises; ETFs and over-the-counter split
Elevated prices continued to weigh on consumer-facing categories. Jewellery demand fell 17% year-on-year in tonnage during the quarter as buyers shifted toward lighter products, though the global value of jewellery sales still rose 22% to $86 billion in the first half. Gold-backed ETFs recorded a net 44.8-tonne outflow during the quarter, taking H1 ETF demand to a modestly positive 18 tonnes. Bar and coin investment was broadly stable, down only 3% year-on-year, with first-half demand running 21% above the prior year. Over-the-counter activity, supported by Asian buyers, reached 327 tonnes in the quarter and helped lift total demand and first-half demand by 2% year-on-year to an estimated 2,522 tonnes worth $380 billion.
Supply: mine output rises, recycling retreats
Total gold supply was unchanged year-on-year at 1,269 tonnes. Estimated mine production increased roughly 2% from a year earlier to 966 tonnes, supported by new projects in Canada and Chile. Recycled gold supply, by contrast, declined 6% year-on-year despite higher prices, suggesting holders prefer to wait rather than sell into the current market.
India, Indonesia and Vietnam diverge on retail dynamics
Retail behaviour varied across major Asian markets in reports dated 2 August. In India, with bullion markets and the MCX closed for the Sunday weekend, 24-karat gold held at ₹1,43,420 per 10 grams and silver at ₹2,18,150 per kilogram, with month-to-date declines of about 2.98% and 8.21% respectively; year-on-year, gold was still up 43.69% and silver 97.31%. Indonesia stood out as one of the world's top gold investment markets, with bar and coin demand surging 40% year-on-year to 14.5 tonnes in Q2, even as Antam's retail bullion price eased to Rp2,603,000 per gram from a January peak of Rp3,168,000. Vietnamese retail counters were described as quiet, with SJC gold bars holding around 137–141 million dong per tael across major brands and unchanged buying and selling spreads of 4 million dong.
Fed dissent and a consolidated price near $4,000
The Federal Reserve held its benchmark rate in the 3.5%–3.75% range at its latest meeting, but three FOMC members voted for an additional 25 basis-point increase, prompting Chair Kevin Warsh to describe the debate as "a good family fight." Spot gold traded around $4,042–$4,056 per ounce in the days around 2 August, down roughly $10 on the prior week's close, while the LBMA PM Q2 average was $4,506.29 per ounce, up 37% year-on-year. Comex gold futures for October delivery settled at $4,076.6 per ounce. Analysts quoted in Indian and Vietnamese coverage pointed to a likely near-term trading range of about $4,000 per ounce globally and ₹1.40–1.44 lakh per 10 grams on the MCX, with the directional move hinging on US employment data, PMI prints, and signals around the Fed's policy path.
What to watch next
The next inflection points for pricing are the US non-farm payrolls report and July unemployment rate, alongside PMI data from the US, UK, Eurozone and Japan, plus any commentary from Fed officials. The World Gold Council's Q3 2026 Gold Demand Trends report is scheduled for release at the end of October.
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