Central Banks

India's gold demand eased in Q2 as elevated prices and policy measures weighed on volumes, although spending remained robust, reaching a record high for a second quarter. Jewellery demand proved resilient despite affordability pressures, while investment demand moderated following a strong run but remained above its long-term average. Supply fell to a six-year low, with ample inventories and increased recycling helping to meet market needs. Looking ahead, demand is likely to remain sensitive to price movements. However, festive and wedding-related purchases, coupled with continued investment interest, should provide support through the second half of the year.

Total gold demand, including OTC, was unchanged y/y at 1,269t in Q2. This took demand for the first half year to 2,522t (+2% y/y), with a record value of US$380bn.

Central banks have accumulated an average of 1,000t of gold over the past four years, up significantly from the 500t average over the preceding decade. This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers.

India’s gold demand rose 10% y/y to 151t in Q1, while nearly doubling in value to a record INR 2,275bn (US$25bn). Growth was led by investment demand, up 54% y/y to 82t, with bar and coin demand nearly matching jewellery consumption and ETFs hitting record highs. Jewellery volumes fell 19% y/y, but spending rose 47%. Investment demand is set to remain supportive, while jewellery demand may stay under pressure from inflation and economic headwinds.

US gold demand softened in Q1 2026 as a sharp reversal in ETF flows outweighed resilience across other segments. Physically backed US gold ETFs recorded sizeable monthly outflows in March, erasing inflows accumulated earlier in the quarter amid risk‑off conditions, elevated positioning and higher opportunity costs. Bar and coin investment provided a partial offset as retail interest remained resilient, while jewellery demand fell to a record quarterly low on affordability pressures. Despite near‑term volatility, ongoing geopolitical tensions, policy‑rate uncertainty and broader macroeconomic risks continue to support the longer‑term investment case for gold in the US.

The strength of world gold prices has enhanced both the level and the value of Artisanal and Small-Scale Gold Mining (ASGM) in countries around the world. This presents challenges to societies and governments on a range of issues related to ASGM mining, such as environmental, societal, legal, regulatory and economic. Several papers exist that cover these issues, the government response to which may be a State Gold Buying Program (SGBP). The purpose of this paper – whilst acknowledging the issues outlined above – is to examine the price-setting process for central banks in a SGBP.

Our 2025 Central Bank Gold Reserves survey helps us shine a light on the continued importance of gold reserve management in these challenging times. This year set a new benchmark, drawing in 73 responses – the highest since our survey commenced eight years ago. This level of participation is a powerful signal of engagement with gold amongst the central banking community.

Central bank buying – which topped 1,000t for the third year in a row – along with a return of Western ETF investment lifted gold demand to a record of 4,974t (US$382bn). The gold price reached multiple record highs during the year, which weighed on global jewellery consumption.