Central Banks Just Bought Gold at a Record Second-Quarter Pace — and the Buying Spree Shows No Signs of Cooling
Published on 08/25/2026 at 12:10 | Redaktion boerse-global.de
The World Gold Council's latest data, released at the end of July, confirms what the price action has been hinting at all summer: official-sector demand has become the quiet engine of the gold market. Central banks added a net 288.9 tonnes of gold in the second quarter of 2026, a 62 percent jump from the same period a year earlier and the largest second-quarter total ever recorded in the industry body's data history.
That structural bid sits beneath a market that has been anything but calm on the surface. Gold closed Monday at $4,728.80 per ounce, roughly 15 percent below its 52-week high but a full 40 percent above its 52-week low — a spread that underscores how far the metal has traveled since the summer trough. The rally, which has delivered a 40 percent gain over the past twelve months, has repeatedly shrugged off pullbacks, a resilience that analysts attribute to the unusual confluence of buyers now active in the market.
Poland Leads, China Follows, and South Korea Changes Course
Poland emerged as the quarter's most aggressive buyer, adding 51 tonnes and continuing its march toward a self-imposed target of 700 tonnes. China's central bank purchased 33 tonnes — its largest single-quarter acquisition since late 2023 — and Bloomberg reports the People's Bank of China has now expanded its reserves for 21 consecutive months.
Smaller central banks are joining the trend. Uzbekistan bought 16.5 tonnes in the first half of the year, while Kazakhstan added 6.5 tonnes. More notable is the strategic pivot announced by the Bank of Korea in August: the institution plans to increase its gold exposure through ETFs and is preparing its first physical purchase in 13 years, while also diversifying storage locations away from London.
The breadth of the buying spree is reflected in the World Gold Council's latest survey of reserve managers. A record 89 percent of respondents expect global central bank gold reserves to rise over the next twelve months, and 45 percent anticipate growth within their own institutions — the highest share ever recorded.
Should investors sell immediately? Or is it worth buying Gold?
Turkey remains the outlier, having reduced its holdings by 8.1 tonnes in January and February to support its currency amid domestic political pressures.
Supply Fails to Keep Pace
The supply side offers little relief. Mine production ticked up just 1.9 percent year-on-year to 965.6 tonnes in the second quarter, while recycling volumes fell 5.9 percent to 326.1 tonnes. Total demand held nearly flat at 1,269 tonnes for the quarter, with first-half demand estimated at 2,522 tonnes — a 2 percent increase valued at $380 billion.
The jewelry sector tells a story of price-driven caution: volumes declined noticeably, yet consumer spending rose 14 percent to $40 billion as buyers paid more for less. Industrial demand, meanwhile, showed surprising strength, with electronics consumption up 3.8 percent to 68.3 tonnes, driven by artificial intelligence applications that are offsetting weakness in traditional consumer electronics.
ETF Flows Tell a Mixed Story
Exchange-traded funds presented a more complicated picture. The sector saw net outflows of 45 tonnes in the second quarter, concentrated in North America, yet individual funds attracted significant inflows — the SPDR Gold Trust alone took in $637 million on August 7.
Bar and coin demand reached 307.1 tonnes, slightly below the 315.6 tonnes recorded a year earlier, a decline the World Gold Council frames as a normalization after two exceptionally strong quarters rather than a loss of momentum.
The Treasury Factor and What Comes Next
The official-sector bid is being reinforced by developments in the bond market. The US Treasury's surprise announcement of expanded buybacks of government debt weighed on yields and the dollar, providing an additional tailwind for gold. That impulse has faded somewhat, but its effects linger in combination with sustained central bank demand.
The immediate test comes at the Federal Open Market Committee meeting on September 15-16, widely viewed as a critical juncture for the metal's near-term trajectory. Yet the structural forces at play suggest the outcome matters less than it once might have. With reserve managers signaling continued accumulation and multiple buyer groups operating simultaneously, gold's role as a preferred reserve asset appears increasingly entrenched — regardless of how interest rate expectations and the dollar evolve in the weeks ahead.
Ad
Gold Stock: New Analysis - 25 August
Fresh Gold information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
