The World Gold Council said investment demand is expected to remain positive for the rest of 2026, with central-bank purchases and Asian investor demand becoming increasingly important drivers of the gold market. According to the organisation, high real interest rates have not suppressed gold prices, while global gold ETFs attracted fresh inflows in July after two months of outflows.
The World Gold Council said central-bank purchases and Asian demand may not always move in line with US interest rates, the dollar or inflation. However, rising yields can still pressure gold in the near term. The organisation added that if tight monetary policy eventually triggers slower growth, higher inflation or financial-system stress, longer-term yields could decline and support gold prices alongside central-bank and Asian demand, although not necessarily at the pace seen in 2025.
World Gold Council highlights ETF inflows and market trends
The World Gold Council reported that global gold ETFs attracted $3.0 billion in July, reversing two consecutive months of outflows. Assets under management increased to $530 billion, while ETF holdings rose by 23 tonnes to 4,068 tonnes. Europe led the July recovery with inflows of $2.0 billion, while Asia added $616 million and remained the largest contributor to global ETF inflows on a year-to-date basis.
The organisation also said gold prices were largely flat in July as positive factors offset negative risks. According to the World Gold Council, a second wave of high inflation similar to the late 1970s cannot be ruled out, but such an outcome alone would not automatically trigger a sharp rally in gold. The future direction of the metal will depend on real interest rates, the US dollar, economic growth expectations, Asian investor demand and central-bank responses.
The World Gold Council added that investment demand is expected to remain the primary driver of gold demand growth during the remainder of 2026, with support increasingly coming from over-the-counter trading and Asian investors. Central banks are expected to remain major buyers. At the same time, elevated prices are likely to continue weighing on jewellery volumes, while mine production and recycled supply are expected to show only limited changes.
Western gold ETF flows are expected to remain sensitive to US real yields, expectations for Federal Reserve policy and movements in the dollar. The organisation also noted that technology demand for gold could benefit from investment linked to artificial intelligence, although downside risks are increasing.
The World Gold Council said the US Federal Reserve now shows a strong aversion to inflation. With the personal savings rate near historic lows, consumers may be less able to absorb sustained increases in prices. As a result, another surge in inflation could lead to tighter monetary policy and slower economic growth rather than a repeat of the inflation conditions experienced in the 1970s.
The organisation also reported that gold-market liquidity continued to ease in July. Average daily trading volume fell to $356.0 billion per day, down 3.5% month-on-month.
Data from the World Gold Council’s Q2 2026 Gold Demand Trends report showed that global jewellery demand fell 17% year-on-year in the second quarter as high prices pushed consumers toward lighter-weight products and away from pure-gold jewellery. Despite lower volumes, jewellery spending increased 22% year-on-year to $86 billion during the first half of 2026.
Total global gold supply remained flat year-on-year at 1,269 tonnes in the second quarter. Estimated mine production increased around 2% year-on-year to 966 tonnes, supported by additional output in Canada and Chile. Recycled gold supply, however, declined 6% year-on-year despite higher prices.
The report showed that total global gold demand was unchanged year-on-year at 1,269 tonnes in the second quarter, while demand during the first half of 2026 increased 2% year-on-year to 2,522 tonnes, equivalent to about $380 billion. Investment in ETFs, bars and coins fell to 262 tonnes during the quarter, mainly because of ETF net outflows of 45 tonnes, although ETFs still recorded net inflows of 18 tonnes during the first half of the year. Asia-led over-the-counter investment reached 327 tonnes in the second quarter and 571 tonnes in the first half.
In China, the World Gold Council said total market demand, including jewellery, bars, gold ETFs and industrial demand, fell 41% year-on-year to 155 tonnes in the second quarter of 2026, marking the weakest second quarter since 2022. Jewellery demand declined 28% year-on-year, while gold ETFs recorded net outflows of 22 tonnes, although consumer spending on jewellery remained elevated despite lower volumes.
