Central banks outpaced jewelry buyers in gold purchases during the third quarter of 2026, acquiring 321 metric tons compared to 313 tons for jewelry. This marks a significant shift from the previous year, when jewelry consumption exceeded central bank purchases by 150 tons. The World Gold Council's latest report highlights that roughly 63% of official gold demand remains untraceable through public disclosures, adding an element of mystery to the market's dynamics.
Despite a 22% increase in global gold demand to $188 billion, the actual volume of gold purchased dropped by 1% to 1,369 tons. The higher price, up 23% from the previous year, absorbed much of the additional spending. Jewelry demand fell 17% to its lowest third-quarter level since 2000, particularly in China and India, where buyers opted for lighter or lower-carat pieces. Physical investment demand also declined by 19% to 268 tons, indicating that higher prices deterred some investors.
Central banks and gold-backed ETFs provided some support to the market, with net purchases rising 42% to 321 tons and ETFs adding 211 tons. However, October saw a downturn, with gold falling 6.3% and Bitcoin losing 7.3%. The price of gold ended October at $3,913 an ounce, roughly 25% below its January peak. Bitcoin, which had surged 42.7% during the third quarter, ended September around $83,570, attracting significant inflows into US spot Bitcoin ETFs.
The World Gold Council's central-bank survey revealed that 74% of respondents expect the US dollar's share of global reserves to decrease over the next five years. This suggests a growing interest in diversifying away from the dollar, although the actual funding mechanisms for gold purchases vary. Some central banks finance purchases through domestic programs using local currency, while others sell existing reserve assets.