LONDON, 30th July, 2026 (WAM) -- The World Gold Council's Q2 2026 Gold Demand Trends report revealed that total gold demand was flat year-on-year at 1,269 tonnes, as the gold price eased from the record highs seen at the start of 2026.

The lower gold price helped lift first-half demand by 2 percent year-on-year to an estimated 2,522 tonnes, worth US$380 billion.

Investment in gold-backed exchange-traded funds (ETFs), bars and coins fell to 262 tonnes in the second quarter as the strong investment momentum seen earlier in the year eased.

The decline was primarily driven by 45 tonnes of outflows from gold-backed ETFs during the quarter, although first-half ETF demand remained modestly positive at 18 tonnes.

Bar and coin investment was relatively stable, declining by just 3 percent year-on-year in the second quarter, while first-half demand remained 21 percent higher than in the same period last year, supported by an exceptional first quarter.

Demand in the over-the-counter (OTC) market, supported by Asian investment, reached 327 tonnes in the second quarter, bringing first-half OTC demand to 571 tonnes.

Meanwhile, central banks and other official institutions added a net 289 tonnes to gold reserves in the second quarter, up 62 percent year-on-year, as buying strengthened across several markets.

Despite the stronger second quarter, first-half demand remained below the elevated levels seen in recent years due to weaker activity in the first quarter.

The World Gold Council's Central Bank Gold Reserves Survey showed that 45 percent of respondents intend to increase their gold reserves over the next 12 months, highlighting gold's enduring importance in official reserves.

High gold prices continued to weigh on jewellery demand in the second quarter, which fell 17 percent year-on-year as consumers reduced purchases and shifted towards lighter products.

While this lowered jewellery volumes during the first half of the year, the value of jewellery demand remained resilient, rising 22 percent year-on-year to a global total of $86 billion.

Total gold supply in the second quarter was unchanged year-on-year at 1,269 tonnes, as higher mine production offset lower recycling.

Mine production increased 2 percent year-on-year to 966 tonnes, supported by new production in Canada and Chile.

At the same time, recycled gold supply declined 6 percent year-on-year despite higher prices.

Louise Street, Senior Markets Analyst at the World Gold Council, said gold prices retreated during the second quarter after the strong rally seen at the start of the year, with the market consolidating following a correction from record highs. Despite this, demand remained supported by strong underlying fundamentals, reflecting gold's established role as a portfolio diversifier and store of value.

She added that although flows into gold-backed ETFs receded alongside lower prices, continued central bank buying and growth in OTC investment helped lift total gold demand by 2 percent during the first half of 2026.

Street said investment is expected to remain the main driver of demand growth in the second half of 2026, although the composition of demand is likely to evolve.