Central Bank Buying Bolsters Gold Demand Amid Investor Caution
The gold market experienced steady demand in the second quarter of 2026, despite weaker investor interest. According to the World Gold Council, total gold demand remained flat year-over-year at 1,269 tonnes. This stability was largely due to strong central bank purchases, which offset the decline in exchange-traded fund (ETF) demand.
The World Gold Council reported that ETFs recorded net outflows of 45 tonnes in the second quarter, as investors became increasingly cautious amid growing inflation and interest rate expectations. However, central banks stepped up their buying, with a 62% year-over-year increase to 289 tonnes.
This surge in central bank purchases has led to revised estimates that gold demand from these institutions will fall below 2025 levels. The World Gold Council reported that the first quarter of 2026 saw weaker-than-expected central bank buying, with only 57 tonnes added, a marked decline from previous trends.