Gold Demand Holds Steady in Q2 Amid Cooling Prices

The second quarter of 2026 saw gold demand hold steady at 1,269 tonnes, despite prices cooling down from their earlier rally. The World Gold Council's Gold Demand Trends report for Q2 2026 reported that total demand remained flat year-on-year, with a value of US$380 billion. Central banks and official institutions continued to show interest in buying gold, with net reserve purchases reaching 289 tonnes in Q2, a 62% increase from the same period last year.

Over-the-counter (OTC) investment also contributed to the steady demand, particularly from Asian buyers. However, exchange-traded funds (ETFs) saw outflows of 45 tonnes in Q2, and jewellery purchases weakened as consumers adjusted to higher prices. According to Louise Street, Senior Markets Analyst at the World Gold Council, 'the market consolidated after a pullback from its highs'.

Total supply remained flat year-on-year at 1,269 tonnes, with estimated mine output increasing by about 2% due to new projects in Canada and Chile. Recycling, however, decreased by 6% despite high prices. Street predicted that investment will drive demand in the second half of 2026, but the mix may shift, with OTC activity and Asian buyers becoming more prominent.

The report highlighted that official institutions are expected to continue buying gold at a significant pace, although not as rapidly as they have over the past four years. High prices will likely maintain soft jewellery volumes, and recycling may remain limited due to sellers' reluctance to part with their holdings.