The latest Global Gold Demand Trends report released by the World Gold Council (WGC) on July 24 shows that global central banks' net gold purchases in Q2 2026 reached 289 tons, up 34% from the same period last year, the highest quarterly level since records began in 2000. This data indicates that against a backdrop of increasing global economic uncertainty, rising geopolitical risks, and challenges to the dollar credit system, central banks are accelerating the inclusion of gold in their reserve assets.
Emerging Market Central Banks Lead the Increase
The report notes that Q2 gold increases came mainly from emerging market countries. The People's Bank of China (PBoC) increased its gold holdings for the 18th consecutive month, adding 46 tons in Q2, bringing total reserves to 2,380 tons, with gold's share of China's foreign exchange reserves exceeding 3.5% for the first time. The Reserve Bank of India (RBI) also performed actively, adding 33 tons in Q2, reaching total reserves of 828 tons. Additionally, central banks of Turkey, Kazakhstan, Uzbekistan added 20 tons, 15 tons, and 12 tons respectively.
"Behind the emerging market central banks' gold buildup is distrust of the dollar-dominated system and considerations for their own currency stability," said James Zhang, precious metals analyst at Credit Suisse. "With the continued expansion of the U.S. fiscal deficit and recurring debt ceiling issues, many countries see a need to reduce dependence on dollar assets." This trend became apparent in Q4 2025 when China, Russia and others accelerated their reduction of U.S. Treasury holdings and turned to gold purchases.
Multiple Factors Drive Safe-Haven Sentiment
Global total gold demand (excluding OTC) in Q2 reached 1,214 tons, up 26% YoY. Among this, gold ETFs saw net inflows of 87 tons, reversing three consecutive quarters of net outflows. Alistair Hewitt, Director of Market Research at WGC, noted: "Investors' concerns about economic recession, persistent inflation, and geopolitical conflicts in the Middle East and Eastern Europe led to significant capital inflows into gold assets."
Specifically, the S&P 500 fell 8.3% in Q2, the Nasdaq declined over 12%, while spot gold prices rose 9.5% during the same period, reaching a high of $2,850 per ounce. Gold's safe-haven properties were once again validated.
On the physical demand side, the two largest gold-consuming countries, China and India, performed strongly. China's Q2 gold consumption reached 256 tons, up 18% YoY, driven mainly by safe-haven buying amid economic slowdown and real estate downturn. India saw a demand peak during traditional wedding season and festivals, with Q2 consumption of 212 tons, up 11% YoY. After India's gold import duty was cut from 15% to 10% in 2025, market activity was further stimulated.
Steady Mine Production, M&A Activity Heats Up
On the supply side, global gold mine production in Q2 was 928 tons, up slightly 2% YoY. Major growth came from new projects in Africa (Mali, Burkina Faso) and South America (Peru, Argentina). Meanwhile, M&A activity in the gold industry has become more active. In June, Canada's Barrick Gold announced the acquisition of Australia's Newcrest Mining for $4.8 billion, aiming to integrate resources in West Africa and the Pacific region. The same month, Newmont Mining sold some Australian assets for $2.2 billion to focus on its core operations.
"The dual impetus of central bank gold purchases and mining M&A is reshaping the supply-demand landscape of the gold market," said Wang Minghui, Vice President of the China Gold Association, in an interview. "We believe gold prices will remain volatile at high levels over the next two years, and the trend of central banks increasing holdings will not reverse."
Market Outlook: Safe-Haven Status Further Strengthened
Looking ahead to H2, WGC expects central bank gold purchases to remain high. In the first two weeks of July, countries including Poland, Serbia, and the Philippines have announced increases in gold reserves. Additionally, expectations that the Fed may pause or even cut rates in September will push real interest rates lower, boosting gold prices.
In its World Economic Outlook released on July 19, the International Monetary Fund (IMF) cut its 2026 global GDP growth forecast from 3.2% to 2.9% and warned of downside risks from trade protectionism, geopolitical conflicts, and climate change. In this context, gold's value as the ultimate safe-haven asset will be further highlighted.
Zhang Yun, analyst at Asia-Pacific Mining & Finance, said: "Investors can focus on gold ETFs and high-quality mining stocks, but should be aware of short-term price volatility. The recommended allocation of gold in a portfolio should be raised to 10%-15% to hedge systemic risks."
- Central bank gold purchases continue to rise; emerging markets play a key role.
- Gold ETF inflows turn positive; strong investor safe-haven demand.
- Mining M&A accelerates; industry concentration increases.
- Gold prices expected to hit new highs in H2 2026, target $3,000/oz.
(Reported by Li Hua, Asia-Pacific Mining & Finance, Singapore)
