Global gold demand remained resilient during the second quarter of 2026 despite a pullback in prices from record highs, with stronger central bank buying and over-the-counter (OTC) investment offsetting weaker exchange-traded fund (ETF) flows.
The World Gold Council’s (WGC) latest Gold Demand Trends report found total gold demand was unchanged year-on-year at 1,269 tonnes in the June quarter. Across the first half of 2026, demand increased 2 per cent to 2,522 tonnes, with a record value of US$380 billion as elevated prices continued to underpin the market.
Investment demand excluding OTC activity fell to 262 tonnes during the quarter as gold-backed ETFs recorded 45 tonnes of outflows following weaker prices.
However, bar and coin investment remained comparatively stable, declining just 3 per cent year-on-year, while OTC demand climbed to 327 tonnes, driven largely by Asian investors.
Central banks also stepped up purchases, adding a net 289 tonnes to reserves during the quarter, a 62 per cent increase from a year earlier.
The WGC said its latest Central Bank Gold Reserves Survey found 45 per cent of respondents intend to increase their gold holdings over the next 12 months.
Senior markets analyst at the WGC, Louise Street, said the market had remained well supported despite the easing in prices.
“Gold’s early-year rally reversed in the second quarter, with prices consolidating after correcting from record highs. But the market remained well supported, reflecting gold’s established role as a diversifier and store of value.
“While gold ETF flows receded in step with prices, continued central bank buying, and growth in OTC investment contributed to total gold demand edging 2 per cent higher across the first half of the year.”
In Australia, investment demand was broadly unchanged during the June quarter as softer gold price momentum and higher local yields weighed on investor appetite.
Bar and coin demand fell 59 per cent year-on-year to 1.5 tonnes, while gold ETFs recorded 1.2 tonnes of outflows. Australian jewellery demand also declined 4 per cent over the period.
Head of Asia (ex-China) and global head of central banks at the WGC, Shaokai Fan, said long-term drivers for gold investment remained intact.
“Australian investment demand for gold flatlined during the June quarter, as cooling gold price momentum and rising local yields may have deterred investors.
“While the momentum trade that fuelled gold’s rally over the past year has faded, fundamental drivers to gold allocation remain: central banks diversifying reserves, investors hedging against shocks and seeking portfolio diversification, alongside growing demand in Asia.
“At the same time, waning confidence in political and fiscal stability, combined with escalating geopolitical risks, is pushing investors to prioritise resilience in portfolio construction. Gold’s proven ability to preserve long-term wealth sits at the heart of that shift.”
Looking ahead, the council expects investment demand to remain the primary driver of growth through the second half of 2026, supported by OTC activity and Asian investors and for central banks to remain significant buyers, although at a slower pace than recent years.