Gold Market Shifts as Central Banks and Investors Drive Demand

The gold market is undergoing a significant transformation, with Chinese jewelry demand plummeting by 30% in the first half of 2026 to 136 tonnes. At the same time, China's savers and the People's Bank of China are aggressively buying up bullion bars, coins, and official reserves.

The World Gold Council's report on gold demand trends for Q2 2026 shows that jewelry consumption worldwide sank to its lowest level since the pandemic. However, central bank purchases and over-the-counter investment flows more than compensated for outflows from gold-backed exchange-traded funds.

Central banks collectively acquired a net 288.9 tonnes of gold in the second quarter of 2026, a 62% jump year-on-year and an all-time high for any second quarter. Poland added 51 tonnes to its reserves during this period.