On July 28, 2026, the World Gold Council (WGC) released its latest quarterly report, stating that global central banks' net gold purchases in Q2 2026 reached 320 tons, up 45% year-on-year, surpassing the historical record set in Q3 2018. This figure far exceeded market expectations, indicating that against the backdrop of rising global economic uncertainty, central banks are accelerating gold reserve accumulation to diversify foreign exchange reserve risks.
Central bank gold buying frenzy continues to heat up
The report shows that 17 central banks increased gold holdings in Q2, with emerging market central banks being the absolute main force. The People's Bank of China added 60 tons, continuing to be the world's largest gold buyer; the Reserve Bank of India added 45 tons, its largest quarterly increase since 2018; and the Central Bank of Turkey added 35 tons, ranking among the top three. In addition, countries such as Kazakhstan, Uzbekistan, Poland, and Hungary also saw varying degrees of increases.
A market analyst at the World Gold Council said: "Central bank gold buying has remained at high levels for multiple consecutive quarters, reflecting central banks' high recognition of gold as a reserve asset. Especially amid current geopolitical tensions, high inflationary pressures, and challenges to the US dollar credit system, gold's safe-haven and value-preserving functions are prominent."
Notably, some developed economy central banks are also buying. For example, the Reserve Bank of Australia slightly increased its holdings by 2 tons in Q2, its first gold purchase since 2013. Analysts believe this may signal a shift in developed country central banks' attitude toward gold.
Gold market supply and demand analysis
On the supply side, global gold supply totaled 1,150 tons in Q2, roughly flat year-on-year. Among this, mine production was 860 tons, and recycled gold was 300 tons. Mine supply remained stable, but some mining areas saw output cuts due to stricter environmental policies. Recycled gold grew slightly due to persistently high gold prices.
On the demand side, besides record central bank purchases, investment demand for gold bars and coins was also strong. Global demand for gold bars and coins in Q2 was 280 tons, up 12% year-on-year, mainly benefiting from safe-haven buying in Europe and North America. In contrast, jewelry demand declined to 450 tons in Q2, down 8% year-on-year, mainly because high gold prices suppressed consumption, especially in China and India.
In the exchange-traded fund (ETF) segment, global gold ETFs saw a net outflow of 30 tons in Q2, but the outflow pace slowed significantly from Q1. Analysts believe that as gold prices returned above $2,000, investor sentiment improved.
Gold price trend analysis: Intense battle around $2,000 mark
Bolstered by central bank buying, international gold prices held steady above the $2,000\/oz integer mark at the end of Q2. As of the Asian trading session on July 28, London spot gold was at $2,013\/oz, and the New York gold futures main contract was at $2,018\/oz, up about 5% from the start of Q2.
Technically, gold prices found strong support near $2,000, but there is some resistance near $2,050. The US dollar index has recently remained weak, falling to around 99.5, which is positive for gold prices. However, Fed officials have recently frequently made hawkish remarks, hinting at possible further rate hikes, limiting gold's upside potential.
Market analysts widely believe that in the short term, gold prices will fluctuate in the range of $1,980-$2,050, awaiting new catalysts. Geopolitical risks, inflation data, and central bank policy moves will be key factors affecting gold prices.
Outlook and investment strategy
Looking ahead to the second half of the year, the World Gold Council expects central bank buying to remain strong, with full-year purchases likely to exceed 800 tons, another record high. This will provide solid support for gold prices. Meanwhile, slowing global economic growth, persistent high inflation, and geopolitical uncertainty will continue to fuel safe-haven demand.
For investors, although gold prices are at historically high levels, considering central bank buying and safe-haven demand, there is still upside potential over the long term. The advice is to adopt a dollar-cost averaging strategy to buy in batches, avoiding chasing highs. Investors can focus on gold ETFs, mining stocks, and physical gold bars.
Risk warning: Fed rate hikes exceeding expectations, global economic recession, and a stronger US dollar could suppress gold prices.
This article represents the author's views only and does not constitute investment advice. Investing involves risk, and entry requires caution.
