Global gold market shifts as investment and central bank demand offset jewelry declines

Global gold demand in the second quarter of 2026 remained stable at 1,269 tonnes, though market structures are shifting significantly. While total demand value reached a record $380 billion in the first half of the year due to high prices, the composition of that demand is changing.

Jewelry consumption has faced pressure, falling 17% year-on-year in Q2. Major markets like China and India saw significant declines in jewelry volume. Conversely, investment demand is pivoting; while gold ETFs saw net outflows due to rising US real interest rates and a stronger dollar, over-the-counter (OTC) trading surged by 91%, driven largely by Asian investors.

Central banks remain a critical pillar of support, with Q2 purchases rising over fourfold compared to the previous quarter. Additionally, gold demand in the technology sector grew by 2%, supported by requirements for high-performance chips in the artificial intelligence industry.

Looking toward the second half of the year, market drivers are expected to lean heavily toward investment demand and central bank reserves, as high prices continue to suppress traditional jewelry consumption.