Gold Buyers Opt for Lighter Jewellery Amid High Prices in Q2

Jul 31, 2026

97 min

Jul 31, 2026 06:30

Gold buyers shifted to lighter jewellery as prices stayed high in Q2

## Jewellery Demand Declines

In the second quarter of 2026, global demand for gold jewellery dropped by 17% compared to the previous year. This decline was largely due to high gold prices, which led consumers to purchase lighter jewellery items. Despite the decrease in volume, the overall value of jewellery demand increased by 22% to $86 billion, as elevated prices compensated for the reduced quantity.

## Investment Trends

Investment in gold, including exchange-traded funds (ETFs), bars, and coins, saw a decrease in momentum during the quarter. The total investment fell to 262 tonnes, with gold-backed ETFs experiencing outflows of 45 tonnes. However, the first half of the year still recorded a positive ETF demand of 18 tonnes. Bar and coin investments also declined by 3% year-on-year, although they remained 21% higher than the same period last year due to a strong first quarter.

## Central Bank Purchases Surge

Central banks increased their gold reserves by 62% in the second quarter, adding a net 289 tonnes. This growth was observed across various markets, although the first-half demand was lower than in recent years due to weaker activity in the first quarter. Looking ahead, investment is expected to drive growth in the second half of 2026, with over-the-counter (OTC) activity and Asian investment playing significant roles.

## Supply and Production

The total gold supply remained stable at 1,269 tonnes during the quarter. An increase in mine production, particularly from Canada and Chile, offset a 6% decline in recycled gold supply. Despite high prices, consumers were reluctant to sell their existing gold, contributing to the lower recycling rates.

## Future Outlook

The World Gold Council anticipates that investment will continue to lead demand in the latter half of 2026. Central banks are expected to remain key buyers, although at a slower pace than in previous years. High gold prices are likely to keep jewellery volumes under pressure, with recycling showing little sign of increasing.

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