Central Banks Return to Gold After Weak Start

Estimated central-bank gold purchases for the first quarter of 2026 were cut from 244 tonnes to 57 tonnes. Official-sector demand then rebounded to a record 289 tonnes in the second quarter. First-half purchases reached 345 tonnes, while total global gold demand increased 2% to 2,522 tonnes, Bloomberg reported.

First-Quarter Estimate Cut by More Than Three-Quarters

Central banks and other official institutions were initially estimated to have bought 244 tonnes of gold between January and March. New information and analysis reduced that figure to 56.5 tonnes, generally rounded to 57 tonnes.

It was the lowest first-quarter result in more than 15 years. The revision removed 187.2 tonnes, or about 77%, from the original estimate.

The figure represents net demand, meaning reported and estimated sales are deducted from purchases. The category includes central banks, sovereign wealth funds and certain other official institutions.

The revision does not mean that 187 tonnes of physical metal disappeared from the market. Some transactions previously assigned to official buyers were moved into over-the-counter and other demand. That category covers bilateral transactions outside centralised exchanges, less visible investment activity, inventory changes and the statistical residual needed to balance supply and demand.

Gold Buying Rebounded to a Second-Quarter Record

The first-quarter weakness did not continue. Net official-sector purchases increased to 288.9 tonnes between April and June, more than five times the revised first-quarter figure.

This was the highest second-quarter total on record and 62% above the 177.9 tonnes purchased during the same period of 2025.

Approximately 84% of first-half official demand therefore occurred in the second quarter. Purchases for the six months reached 345 tonnes, the lowest first-half result since 2022, when official institutions acquired 241 tonnes.

The result was weaker than the exceptionally high totals recorded in recent years, but it did not indicate a broad withdrawal from gold. Official purchases remained elevated compared with the levels commonly seen before buying accelerated in 2022.

Opaque Transactions Complicate Gold Statistics

Reserve data are reported unevenly. Some institutions disclose monthly changes, others publish figures after a delay, and part of official-sector activity is never immediately identified.

Quarterly estimates therefore combine publicly reported reserve changes with calculated unreported demand. Transactions may later be moved to another category if the evidence linking them to an official buyer is insufficient.

The World Gold Council’s second-quarter report places revised first-quarter central-bank demand at 56.5 tonnes and over-the-counter and other demand at 243.7 tonnes. Total demand for the period was revised to 1,253.1 tonnes.

The reclassification materially changed the estimated composition of buyers but had a smaller effect on the size of the overall market. Gold may still have been acquired by a private fund, bank, corporation or wealthy investor even if the transaction was initially attributed to an official institution.

Poland Became the Largest Reported Buyer

The National Bank of Poland added 51 tonnes during the second quarter. First-half purchases reached 82 tonnes, increasing the country’s holdings to approximately 632 tonnes.

Poland moved closer to its stated target of 700 tonnes. Its reserves stood at about 550 tonnes at the end of 2025, implying growth of almost 15% during the first six months of 2026.

The People’s Bank of China bought 33 tonnes in the second quarter, its largest quarterly addition since late 2023. Reported first-half purchases reached 40 tonnes, taking official holdings to approximately 2,346 tonnes.

Uzbekistan added about 16 tonnes between April and June, while Kazakhstan purchased 15 tonnes. Jordan and the Czech Republic acquired approximately 6 tonnes each. Smaller additions were reported by Ghana, Singapore, the United Arab Emirates and Kyrgyzstan.

These figures cover disclosed transactions. Actual changes may be higher because some official purchases are reported with a delay.

Russia Was the Quarter’s Largest Seller

Official-sector sales slowed substantially in the second quarter. Russia reduced its holdings by approximately 22 tonnes, making it the largest reported seller.

Turkey, which sold about 70 tonnes in the first quarter, recorded a second-quarter reduction of roughly 4 tonnes. A significant share of its earlier transactions involved exchanging gold for foreign currency and liquidity. Such swaps can be temporary because the metal may return to reserves when the contract matures.

Germany reported a decline of approximately 1 tonne. Changes of this size are generally associated with the production of investment and commemorative coins rather than a strategic shift in reserve policy.

Azerbaijan’s sovereign oil fund sold about 22 tonnes during the first quarter, partially reversing purchases made in 2025. Russia disposed of a similar amount during the same period.

Heavy sales by Turkey, Russia and Azerbaijan contributed to the relatively weak first-half total.

Global Gold Demand Continued to Grow

Total demand, including over-the-counter transactions, was virtually unchanged from a year earlier at 1,268.9 tonnes in the second quarter. First-half demand increased 2% to 2,522 tonnes.

The value of six-month demand reached a record $380 billion. The increase reflected elevated bullion prices: gold averaged $4,506.29 per troy ounce during the second quarter, 37% more than a year earlier.

A troy ounce, the standard weight used in precious-metals markets, is equal to 31.1035 grams.

The quarterly average was 8% below the record established between January and March. By late July, bullion had lost almost 30% from its January peak above $5,400 an ounce.

Lower prices reduced the cost of new official purchases and may also have attracted private investors waiting for a more favourable entry point.

Bar and Coin Demand Remained Elevated

Investors bought 307.1 tonnes of gold bars and coins during the second quarter. The figure was 3% lower than a year earlier and 36% below the exceptionally strong first quarter.

First-half demand reached almost 784 tonnes, one of the strongest opening six-month periods on record. Purchases had totalled 476.8 tonnes in the first quarter.

China remained the largest market. Local investors acquired 107.2 tonnes in the second quarter and a record 314 tonnes during the first half. First-quarter buying alone reached 206.9 tonnes.

Indian bar and coin demand increased 9% to 50.3 tonnes in the second quarter. First-half purchases reached 112.6 tonnes, the highest for the period since 2013.

Gold-Backed Funds Lost 45 Tonnes

Physically backed gold exchange-traded funds recorded second-quarter outflows of 44.8 tonnes, worth approximately $4 billion.

An exchange-traded fund issues marketable shares linked to gold held on behalf of investors. It provides exposure to bullion prices without requiring buyers to store physical bars.

Selling intensified in June, when global fund holdings declined by 74 tonnes. North American products accounted for most of the quarterly withdrawals.

The strong start to the year was not fully reversed. Global funds still added 18 tonnes during the first half, with net inflows of about $8 billion. Asian holdings rose by 70 tonnes and European holdings by 8 tonnes, while North American funds lost 61 tonnes.

High Prices Reduced Jewellery Consumption

Global jewellery consumption declined 17% to 278.2 tonnes in the second quarter, the lowest quarterly volume since the pandemic.

Consumer spending nevertheless rose 14% to $40 billion. Buyers acquired less jewellery by weight but paid more because bullion prices remained substantially above the previous year’s level.

Jewellery fabrication used 310.3 tonnes, a decline of 12%. The difference between production and final consumption reflected inventory changes among manufacturers and retailers.

Technology demand increased 2% to 80.4 tonnes. Electronics usage rose 4% as demand from data centres and artificial-intelligence infrastructure offset weakness in consumer devices.

Mine Production Rose as Recycling Declined

Total second-quarter gold supply was virtually unchanged at 1,268.9 tonnes.

Mine production increased 2% to a second-quarter record of 965.6 tonnes. After accounting for a reduction in producer hedging, net mine supply stood at 942.8 tonnes.

Recycled supply declined 6% from a year earlier to 326.1 tonnes and was 13% lower than in the first quarter. Softer bullion prices reduced the incentive for consumers to sell old jewellery and other gold products.

Central Banks Still Plan to Increase Reserves

The first-quarter revision did not eliminate official institutions’ strategic interest in the metal. Among 76 surveyed reserve managers, 89% expected aggregate central-bank gold holdings to rise over the following 12 months.

A record 45% anticipated an increase at their own institution. Only 1% expected its reserves to decline.

Gold serves as a long-term store of value and a portfolio diversifier for central banks. It is not a liability of a particular government or issuer and can also be used to obtain foreign-currency liquidity.

High prices can nevertheless restrain purchases. The European Central Bank has noted that appreciation automatically increases gold’s share of existing reserves, reducing the immediate need to acquire additional metal.

As International Investment experts report, the reduction of the first-quarter estimate from 244 tonnes to 57 tonnes illustrates the limitations of real-time assessments of undisclosed official activity. It would also be premature to conclude that central-bank demand has collapsed, since second-quarter purchases reached a record for the period. The first-half total was still the lowest since 2022, meaning the market cannot assume consistent support from official buyers. Future transactions will depend on bullion prices, individual countries’ liquidity requirements and the willingness of reserve managers to disclose changes promptly.

Frequently Asked Questions

How much gold did central banks buy in the first quarter of 2026?

The revised estimate is 56.5 tonnes, generally rounded to 57 tonnes. The original estimate was 244 tonnes.

Why was the original estimate reduced?

New information emerged, and some transactions were reclassified from official-sector demand to over-the-counter and other demand. This category includes less visible investment transactions and the statistical residual.

How much gold was purchased in the second quarter?

Net official-sector purchases reached 288.9 tonnes. This was the highest second-quarter total on record and 62% above the previous year.

Which countries were the largest buyers?

Poland added 51 tonnes during the quarter, while China bought 33 tonnes. Uzbekistan, Kazakhstan, Jordan and the Czech Republic also reported notable purchases.

Why do central banks sell gold reserves?

Sales can provide foreign-currency liquidity, rebalance reserve portfolios or realise gains. Some transactions are temporary gold-for-currency swaps rather than permanent disposals.

Did total global gold demand decline?

No. Second-quarter demand was unchanged from a year earlier, while first-half demand rose 2% to 2,522 tonnes.