Gold Demand Trends: Q2 2026

Investment demand excluding OTC fell to 262t in Q2. The main driver of the decline was a y/y shift to moderate ETF outflows alongside broadly stable bar and coin buying. This marked a shift from the exceptionally strong momentum seen in the previous two quarters as gold corrected from record highs and weakened near-term price expectations.

Investors showed more caution in the face of this price correction and period of consolidation, and their caution was underscored by the potential prospect of higher interest rates in some markets. Bouts of dip-buying were seen during the quarter, with investors broadly continuing to view gold as a strategic asset.

The OTC and stock flows element of demand, which captures less visible elements of investment demand as well as any statistical residual from the data, was 327t in Q2. Added to the upwardly revised Q1 figure (244t), the H1 total for this category of demand was a sizable 571t.

While OTC demand is not directly observable, the positioning of speculative investors in the US futures market can be somewhat indicative: net long positions held by money managers have increased steadily from late April, reaching levels not seen since the gold price peaked in late January.

Anecdotal reports suggest that much of the OTC buying was concentrated among Asian markets rather than being globally distributed. This broadly reflects the increasing dominance of Asian investors across the more visible investment channels (bars, coins and ETFs) in recent quarters.

ETFs

Physically-backed gold ETFs reversed course in Q2, thanks to heavy June selling. Global holdings fell by 45t during the quarter, reducing the H1 increase to 18t. The quarterly reversal was concentrated in June, when global investors cut holdings by 74t.

In value terms, Q2 outflows totalled US$4bn, bringing H1 inflows down to US$8bn. Total global AUM fell to US$526bn at end-June, with the decline driven mainly by the lower gold price despite the modest increase in tonnage holdings over the first half.

Regional trends shifted notably during Q2. North American-listed funds bore the brunt of the selling, losing 45t during the quarter and 61t over H1, the region's weakest first half since 2013. The pullback in the price was a key trigger, while hawkish signals from the new Fed Chair, inflation concerns linked to the US-Iran conflict, rising real yields, and a stronger dollar, all raised the opportunity cost of holding gold.

Asia remained the standout region for H1 despite suffering its worst monthly outflow on record in June. Funds listed in the region increased by 70t over the first half (their strongest H1 on record) but lost 15t in Q2 as Chinese investors rotated towards stronger local equity markets and away from gold amid weaker price momentum. Japanese funds also saw Q2 outflows after the Bank of Japan raised rates. Indian funds bucked the regional trend, adding 4t during the quarter as local investors treated the price correction as an entry opportunity.

European-listed funds were the sole region to see positive Q2 demand (16t) despite giving back some ground in June. Regional demand for the first half year netted out at a modest 8t (US$3bn). The UK dominated positive flows in Q2 with 17t of increased demand, likely aided by domestic political uncertainty. In contrast, Switzerland and France both saw minor outflows over the quarter; these were concentrated in June, likely – at least in part – a response to the ECB's 25bp rate hike.

Funds listed in other regions saw mild Q2 declines of 1t (-US$173mn), leaving H1 buying marginally higher at US$106mn. The Q2 decline was led by Australian funds, which shed 1t (US$139mn).

Despite the weak close to the quarter, the H1 picture remains modestly positive. Global gold ETF holdings were up 18t over the first half, with Asian inflows (70t) dominating the regional picture and Europe contributing healthy buying (8t), while North America was the only region to record H1 outflows (-61t). This confirms that ETF demand cooled sharply in Q2 after the strong start to the year, but did not fully unwind the broader positive H1 trend.

Bar and coin

Global bar and coin investment was broadly unchanged y/y but down sharply from the exceptionally strong Q1 (-36%). Even so, H1 demand of 784t was one of the strongest first-half performances on record. The steep quarterly decline occurred as investment normalised following the extraordinary activity seen in Q4'25 and Q1'26. Demand in Q2 returned to levels consistent with the longer-term trend: average quarterly bar and coin buying over the five-year period from Q4'20 to Q3'25 was 305t.

While tonnage demand was little changed y/y, elevated gold prices lifted the value of bar and coin investment to US$44.5bn compared with US$33.3bn a year earlier.

The q/q drop in volumes was widespread across markets and largely reflected a return to more typical buying patterns after two unusually strong quarters. Viewed in this context, Q2's weakness appears more a normalisation from elevated levels than a deterioration in underlying investment demand; H1 comparisons remain broadly positive across most markets, with a handful of notable exceptions from Vietnam, Iran, Australia and Switzerland.

China

China remains the largest bar and coin market globally. Demand reached 107t in Q2, down from the exceptional 207t recorded in Q1 and 7% lower y/y. Even so, Q2 was historically strong, underscoring the depth of investor appetite for gold and helping to deliver the strongest first half on record: H1 demand climbed to 314t.

Buying was strongest in April as investors responded to heightened market uncertainty. Activity softened at times in May as price volatility increased, before recovering in June as price pullbacks encouraged dip-buying.

The core drivers of demand remain firmly in place. Safe-haven motives, subdued local yields, weakness in the property sector – despite a mild rebound – and concerns over the economic outlook all continued to support investment demand. Continued PBoC gold purchases also reinforced confidence in gold among domestic investors.

The Chinese VAT reform continues to provide an additional tailwind. With investment products remaining exempt, some consumers who might previously have bought jewellery for investment purposes favoured bars, coins and gold accumulation products instead.

We have also observed sustained strong demand for gold accumulation plans (GAPs) – bank-offered products linked to physical gold with trading features.

Looking ahead, demand should remain relatively resilient. Periods of price volatility may create temporary pauses in buying, but the broader investment case for gold remains well supported by elevated uncertainty, low bond yields and limited alternative investment opportunities. Any sustained correction in the gold price could generate fresh buying interest.

India

Indian bar and coin investment increased 9% y/y to 50t. Although demand eased from Q1's elevated level, H1 demand reached 113t, the strongest first half since 2013.

Buying activity was strongest around Akshaya Tritiya in mid-April, before softening as the price rally cooled and gold corrected lower. Uncertainty over the near-term price outlook tempered fresh demand, which also faced notable barriers from the hike in gold import duty and government messaging aimed at deterring gold purchases.

Nevertheless, investors largely retained their positive expectations for gold. And the pullback in the local price in mid-June to below the psychologically important Rs150,000/10g level signalled an important buying opportunity, sparking a pick-up in activity late in the quarter. This was also reflected in demand for digital gold products, which rebounded in June.

The prospects for Indian gold demand remain closely tied to the price and the monsoon. Cumulative rainfall as of mid-July was significantly lower than normal, implying a potential risk to demand for H2. But a period of continued relative stability in the local price could offset this to some degree and may offer the market some support.

Middle East and Turkey

Investment demand remained relatively resilient across the Middle East during Q2, as regional geopolitical uncertainty supported safe-haven buying and the price correction later in the quarter encouraged bargain hunting.

Saudi Arabian demand was fairly robust at 4t; buying picked up in May and June on positive price expectations.

Investment in the UAE strengthened notably (+30%). Gold bar and coin demand benefitted from safe-haven buying and the sharp rise in India's import duty, which improved the relative appeal of buying gold in the UAE.

By contrast, Iranian demand weakened sharply from a high Q2'25 base as the war subdued investment activity.

Turkey remains one of the world's largest physical investment markets, with Q2 bar and coin demand of 19t, albeit that demand saw a steep q/q drop from its high Q1 base. Persistent inflation and macroeconomic uncertainty continue to support gold's appeal as a store of value.

Demand was strongest in April, as investors bought into the gold price rebound following the sharp Q1 correction. This was followed by a lull until June, when investors returned to the market in bargain-hunting mode as the price corrected back to US$4,000/oz.

US and Europe

Investment demand in Western markets showed diverging trends. In the US, bar and coin buying (14t) was higher y/y but well below Q1. Investors were disappointed by the lack of upside in gold prices during a period of heightened geopolitical tensions. Largely range-bound prices proved to be a significant headwind, punctuated by short-lived bouts of bargain hunting. Selling-back activity was also subdued relative to Q1.

In contrast, European retail investment slowed sharply as the correction in gold prices during Q2 encouraged investors to adopt a more cautious approach. Demand across the region fell to its weakest level since Q3'24, as elevated levels of selling back continued to dampen demand for newly manufactured products.

ASEAN

ASEAN markets delivered, for the most part, healthy y/y growth despite steep q/q corrections as investment normalised from exceptional Q1 levels.

Indonesia remains one of the strongest-performing markets globally, with investment demand 40% higher y/y at 15t. Currency weakness and concerns about the domestic economic outlook continued to reinforce gold's role as a store of value. The Indonesian government formalised its gold ambitions earlier this year with the launch of a bullion system roadmap, a strategic initiative aimed at strengthening the national bullion ecosystem, supporting downstream development in the gold sector.

Thailand recorded its strongest second quarter since 2019 as the correction in the local gold price encouraged bargain hunting. Market participants reported growing participation from younger investors, along with strong interest in gold savings accounts.

By contrast, Vietnamese demand weakened as lower local prices undermined sentiment and constrained import quotas distorted market conditions, keeping the local price premium discouragingly high. Malaysia remains comparatively resilient, despite uncertainty caused by regulatory changes that affect imported bullion products.

Rest of APAC

South Korea maintained healthy growth from a low base despite a significant q/q decline. Investor attention increasingly shifted towards more buoyant domestic equity markets as gold prices corrected through the quarter.

Gold's lacklustre Q2 performance sparked a shift to net disinvestment in Japan – a significant decrease from the minor levels of selling back seen in Q2'25.

Some bargain hunting appeared in June, but the uptick in fresh purchases was comfortably offset by liquidations from investors who were tempering their expectations for the gold price.

Australia was among the weakest markets globally. Investment demand fell to 1t, the lowest quarterly level in our data series. The drop reflected softer prices, increased profit taking and the higher opportunity cost of holding gold following 75bps of rate hikes in the first half of the year.

Although the quarter started on a healthy note, buying slowed sharply through May and June as the gold price continued to weaken and investors increasingly favoured interest-bearing assets.