Central banks set a Q2 record
The World Gold Council said in its Q2 2026 Gold Demand Trends report, dated 30 July 2026, that official institutions added a net 289 tonnes to reserves in the second quarter, the largest quarterly central-bank purchase on record. The WGC put the year-on-year increase at 62%, while The National, drawing on the same dataset, reported a 74% year-on-year jump; the gap reflects different base-period adjustments in the two write-ups. Poland was the biggest buyer at 51 tonnes, lifting holdings to 632 tonnes by end-June, followed by China at 33 tonnes, its largest quarterly addition since the fourth quarter of 2023, bringing Chinese reserves to 2,346 tonnes. Other notable buyers included Uzbekistan (16 tonnes), Kazakhstan (15 tonnes), Jordan and the Czech Republic (six tonnes each). India's Reserve Bank added 200 kg, according to WGC regional chief Sachin Jain. The WGC's Central Bank Gold Reserves Survey showed 45% of respondents intend to increase reserves over the next 12 months.
Total demand holds steady as jewellery softens
Global gold demand in Q2 2026 was essentially flat year-on-year at 1,269 tonnes, the WGC said, with the first half running 2% higher at an estimated 2,522 tonnes valued at roughly $380 billion. The Financial Express, citing WGC data, gave a different global figure of 941.8 tonnes, down 14% from a year earlier; the gap reflects whether over-the-counter and certain institutional flows are included in the respective tallies. Jewellery demand fell 17% year-on-year by volume as consumers bought less and shifted to lighter products, though the value of H1 jewellery demand still rose 22% to $86 billion. India remained the world's largest gold jewellery market, accounting for 27% of global jewellery demand, followed by China at 25%, according to the WGC's India report.
Investment flows turn mixed
Investment in gold ETFs, bars and coins fell to 262 tonnes in Q2, the WGC said, driven by 45 tonnes of outflows from gold-backed ETFs as prices corrected from first-quarter highs. First-half ETF demand remained modestly positive at 18 tonnes, while bar and coin demand slipped just 3% year-on-year in the quarter, with H1 demand 21% higher than a year earlier, supported by an exceptional first quarter. Over-the-counter activity, supported by Asian buyers, came in at 327 tonnes in Q2 and 571 tonnes in H1. In India, investment demand eased to 54 tonnes from a three-quarter average of 100 tonnes, and gold ETF holdings dropped to 4 tonnes, down 80% from a record 20 tonnes in Q1, the lowest level since Q2 2025.
India faces grey-market pressure after duty hike
India's gold demand fell 6% year-on-year to 131.4 tonnes in the April-June quarter, the WGC said, as jewellery consumption dropped 15% to 75 tonnes, the second-lowest quarterly level in the council's data series since 2000. The report attributed the weakness to seasonally subdued sales, an increase in import duty and Prime Minister Narendra Modi's appeal to reduce purchases. India more than doubled import tariffs to 15% on 13 May to narrow the trade deficit and support the rupee, widening the price gap that grey-market operators exploit: combined duty and GST create an 18% differential, according to Sachin Jain. Indian enforcement seizures nearly doubled after the hike, rising to 160.91 kg between 13 May and 30 June from 86.16 kg between 1 April and 12 May. Net gold imports fell 23% to 98.1 tonnes, the lowest quarterly level since September 2020.
Price action and Fed backdrop
Gold gave up earlier gains in Indian trading on 30 July 2026, with MCX August futures falling Rs 181 (0.13%) to Rs 1,41,600 per 10 grams and October futures down Rs 252 to Rs 1,43,031, while Comex August futures traded near $4,031.70 per ounce. Earlier in the session, spot gold had risen about 1% to $4,064.33 per ounce as the dollar weakened after the Federal Reserve held its benchmark rate at 3.50%-3.75% for a fifth consecutive meeting, with Cleveland's Beth Hammack, Minneapolis's Neel Kashkari and Dallas's Lorie Logan dissenting in favour of a 25-basis-point hike. Fed Chair Kevin Warsh described the debate as a "good family fight" and refrained from fresh forward guidance. Renewed Middle East tensions, including a reported Iranian missile attack on US forces and joint US-Saudi strikes against Iran-backed groups in Iraq, added a safe-haven bid despite higher Treasury yields.
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