Central Banks Fuel Gold Demand as Retail Fades

The gold market is experiencing a two-speed trend, with central banks hoarding bullion at a record pace while retail demand falters. According to the World Gold Council's latest quarterly report, central banks purchased a net 289 tonnes of gold in the second quarter, a 62% surge year-on-year.

Poland led the charge with 51 tonnes, followed by China's central bank, which added 33 tonnes, including 15 tonnes in June alone. Kazakhstan and Uzbekistan also made significant purchases for the first time. The World Gold Council reports that 45% of central banks intend to expand their reserves over the next twelve months.

Retail-facing demand, however, tells a different story. Global jewelry consumption dropped 17% to 278 tonnes, with China's jewelry market contracting by 41%. Jewelry purchases in India declined 28%, and gold ETFs saw outflows of 22 tonnes.