On July 30, the World Gold Council's Q2 2026 Global Gold Demand Trends Report revealed that total global gold demand remained flat year-on-year at 1,269 tonnes in the second quarter. For the first half of the year, total demand reached 2,522 tonnes, with a value of approximately $380 billion, setting a new record. As gold prices pause their rally and the market shows resilience, what does this mean for investors? What signals are hidden behind central bank gold purchases, jewelry consumption, and technology use data?
Global central banks purchased 289 tonnes of gold in the second quarter, a net increase of 62% year-on-year. A previous survey on central bank gold reserves indicated that 89% of central banks expect global official gold reserves to rise further over the next 12 months. Jia Shuchang, head of World Gold Council Asia-Pacific (excluding India) and deputy director of industry expansion for China, stated, "Central bank reserve managers generally believe that the most direct drivers for allocating gold are, on one hand, the need for portfolio diversification, and on the other, rising geopolitical risks, which accelerate the desire to diversify assets away from the U.S. dollar." Chen Yanbing, a senior strategy analyst at China Asset Management, pointed out that central bank gold purchases act as a "slow variable" in gold prices, not immediately pushing them higher, but providing a long-term pricing floor. He advised investors to learn from central banks' allocation strategies rather than viewing them as signals for short-term large-scale buying.
Due to high gold prices, global jewelry demand fell 17% year-on-year in the second quarter, yet spending on gold jewelry rose 22% to $86 billion in the first half of the year. This highlights a trend of "volume decline with price increase." In the domestic market, second-quarter jewelry demand was only 50 tonnes, the lowest for the same period since 2005. However, first-half spending reached 141.9 billion yuan, up 2% year-on-year, marking the second-highest historical level. Jia Shuchang attributed the weak second-quarter jewelry demand to high and volatile gold prices and the traditional off-season. Notably, consumers are reducing purchases of pure gold jewelry and opting for lighter-weight products, with lightweight hard gold and ancient method gold gaining popularity. This reflects a shift from "buying by weight" to "buying by craftsmanship." The World Gold Council predicts that second-half jewelry consumption may gain seasonal support, but low consumer confidence and high jewelry costs could continue to weigh on demand. Nevertheless, demand for lightweight and high-end series products will boost jewelry spending.
Driven by the artificial intelligence industry, technology-related gold demand rose slightly to 80 tonnes in the second quarter, up 2% year-on-year, with electronics sector demand increasing by 4%. Gold use in AI chips, advanced packaging, and 5G communications offset weaknesses in the consumer electronics market. "Technology-related gold demand accounts for only 5% to 6% of total global gold demand, providing only a marginal support for prices," Chen Yanbing cautioned. He emphasized that the impact of AI on gold demand should not be overestimated, but the structural growth from the expanding AI sector remains an important footnote to gold demand diversification. Investors can understand the diversified anchors of gold demand through the growth in technology-related gold use.
Looking ahead to the second half of the year, investment demand is expected to drive gold demand growth. The World Gold Council forecasts that over-the-counter trading and Asian investment demand will play an increasingly significant role, while Western market interest in gold ETFs is closely tied to U.S. Treasury real yields and U.S. monetary policy expectations. For individual investors, Chen Yanbing offered the following advice: First, track three key variables: the Federal Reserve's interest rate path determines upside pressure, while inflation trends dictate the urgency of rate hikes. Second, keep positions between 5% and 10%, as gold's characteristic of "long-term upward trends with short-term high volatility" aligns well with dollar-cost averaging strategies.
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