Second quarter purchases hit 289 tonnes, highest Q2 on record (though not the highest single quarter overall), as 89% of reserve managers expect global holdings to keep rising
KEY TAKEAWAYS:
- Central banks purchased 289 tonnes of gold in Q2 2026, up 62% year over year
- Poland added 51 tonnes, China added 33 tonnes (per WGC data)
- 89% of reserve managers expect global gold holdings to rise
- South Korea returned to gold after a 13 year hiatus
- Domestic purchase programmes are creating a new demand channel that bypasses international markets
Central banks and sovereign wealth funds purchased 289 tonnes of gold in the second quarter of 2026, up 62% year over year and the highest second quarter total on record, led by Poland’s 51 tonne addition and China’s 33 tonne purchase (per WGC data, though some estimates place the figure closer to 20 tonnes), according to data from the World Gold Council (WGC).
The buying spree, valued at approximately $16 billion at current prices, took place during a quarter in which gold fell by around 16% from its January record high of $5,598/oz to around $4,027/oz by end June (LBMA PM fix). The LBMA PM gold price averaged $4,506/oz in Q2, down 8% from Q1’s record but still 37% higher than Q2 2025. Central banks interpreted that weakness not as a warning signal but as an opportunity to accumulate at lower prices.
“Gold’s role as a long term store of value continues to feature prominently in central bank thinking,” WGC analysts said. “The wider geopolitical backdrop, as well as softer gold prices, are likely to have provided some support for the increased second quarter buying.”
WHAT THIS MEANS FOR INVESTORS:
- Central bank demand is creating a structural floor for gold prices
- Domestic purchase programmes are reducing supply available to Western markets
- The US dollar’s share of global reserves is expected by 74% of reserve managers to decline
- Gold’s liquidity risk is often underestimated, treat it as a long term strategic asset, not a short term trade
Poland and China Lead the Buyers
The National Bank of Poland was the largest single buyer in the second quarter, adding 51 tonnes and bringing its gold reserves to 632 tonnes by end June, rising to around 641 tonnes by July (Poland added 91 tonnes in the first seven months of 2026, including 51 tonnes in Q2 alone). The move lifts Poland’s first half purchases to 82 tonnes, reinforcing its position as the dominant buyer so far this year and edging it closer to its self-imposed target of 700 tonnes of gold reserves.
Poland’s central bank has been one of the most aggressive gold accumulators globally, viewing the metal as a hedge against geopolitical risk and a store of value in an uncertain world. Governor Adam Glapiński has repeatedly emphasised the strategic importance of gold, particularly given Poland’s position on NATO’s eastern flank.
The People’s Bank of China followed with 33 tonnes in the second quarter, its largest quarterly addition since the fourth quarter of 2023 lifting reported holdings to 2,346 tonnes by end June. The increase signals Beijing is accelerating its diversification strategy after a quieter phase, consistent with China’s stated goal of reducing its reliance on US dollar denominated assets.
Other notable buyers in the quarter included the Central Bank of Uzbekistan (16 tonnes), the National Bank of Kazakhstan (15 tonnes) and the central banks of Jordan and the Czech Republic (approximately 6 tonnes each).
Not every central bank was buying. The Bank of Russia was the quarter’s largest seller at 22 tonnes, understood to be driven by pressure on the federal budget gold serving as a liquidity reserve to plug deficits. Turkey also returned to the selling side, though at just 4 tonnes it was markedly more restrained than in the first quarter. Azerbaijan was also a net seller in the first half of 2026, though specific quarterly figures were not disclosed.
South Korea Returns After 13 Year Hiatus
In a development that signals broadening consensus among developed and emerging economies, the Bank of Korea made its first gold related investment in 13 years, holding 679,765 shares of SPDR Gold Trust (GLD) valued at $250.4 million as of the end of the second quarter, according to a filing with the US Securities and Exchange Commission.
Separately, on August 3, 2026, the Bank of Korea announced it will begin purchasing domestically produced gold from local producers (LS MnM and Korea Zinc) via the Korea Exchange, targeting 4-5 tonnes per year. While modest in absolute terms, this represents a symbolic shift for a country with negligible domestic production and a history of caution on gold. The move marks the central bank’s first domestic physical gold purchases since 2013 and complements its ETF investment.
The Korean central bank’s return to gold follows its last direct purchase of physical gold in 2013. The move represents a notable shift for a central bank that had been among the more cautious on gold. Analysts view South Korea’s re-entry as validation of gold’s strategic role in modern reserve portfolios and a signal that even developed economies with sophisticated reserve management are turning to gold.
Survey Points to Structural Shift
The World Gold Council’s 2026 Central Bank Gold Reserves Survey, conducted among reserve managers across advanced and emerging economies with a record 76 responses, the highest participation since the survey began nine years ago found that 89% of respondents expect global central bank gold holdings to rise over the next 12 months. A record 45% expect their own institutions to add to their reserves.
Perhaps more striking is how reserve managers now describe gold’s purpose. Only 46% of respondents cited historical legacy as a reason for holding gold, down significantly from previous years. Instead, a record 90% identified gold’s performance during times of crisis as a key reason for holding it.
The WGC describes this as a shift away from holding gold as a legacy asset towards treating gold as an active, strategic allocation amid geopolitical uncertainty, rising currency volatility and reserve diversification.
“Reserve managers increasingly view gold less as a historical inheritance and more as an active strategic allocation within modern reserve portfolios,” the WGC said.
Nearly three quarters of respondents (74%) expect the US dollar’s share of global reserves to be moderately or significantly lower five years from now, while 84% believe gold’s share of global reserves will be higher over that period.
Domestic Purchase Programmes, A Limited but Growing Trend
A small but growing number of central banks now run domestic gold purchase programmes, buying gold from smaller scale miners within their own countries. The trend represents a structural change in how reserves are managed in select emerging economies, bypassing international markets and creating a new demand channel.
Ghana’s GoldBod took over domestic gold purchases from the Bank of Ghana in early 2026, following IMF concerns over quasi-fiscal activity. The government allocated $429 million in its revised 2026 budget to fund GoldBod’s purchases, shifting fiscal risk from the central bank to the state. The transition follows a $1.7 billion loss on the programme in 2025, prompting IMF concerns over quasi-fiscal risks.
Kazakhstan and Uzbekistan are among the other countries that operate domestic gold purchase programmes, allowing their central banks or designated agencies to accumulate gold without competing in international spot markets while supporting local mining industries. South Korea’s newly announced domestic programme will add to this trend, targeting 4-5 tonnes per year from domestic by-product producers.
Expert View: A Structural Shift, Not a Short Term Trend
The sustained pace of central bank buying raises an obvious question: is this demand sustainable and what does it mean for price discovery?
“The question is not whether central banks will keep buying it’s whether they can sustain this pace,” said Trevor Bester. “Domestic purchase programmes and the shift toward gold as a strategic allocation suggest this is a structural shift, not a short term trend. Half of respondents to the WGC survey indicated they would fund new purchases through domestic purchase programmes in local currency. That creates a demand channel that bypasses international markets entirely.”
Bester noted that the breadth of buying across numerous institutions from different regions with different motivations points to a fundamental realignment in how official institutions view gold.
“Central bank buying is the most credible form of demand,” he said. “When the world’s most sophisticated investors are accumulating gold at a record pace, it sends a clear signal about the future of fiat currencies and geopolitical risk. The move by South Korea, after 13 years of absence, is particularly significant; it signals a broad consensus across both developed and emerging economies.”
On price discovery, Bester suggested the market may still be pricing in short term volatility rather than the long term structural shift.
“The question for markets is whether they’ve priced in this structural shift or remain anchored to short term price movements,” he said. “Central banks have accumulated an average of 1,000 tonnes per annum over the past four years, up significantly from the 500 tonne average over the preceding decade. That’s a permanent change in demand dynamics. The market may still be catching up.”
What This Means for Global Markets
The sustained pace of central bank accumulation has implications that extend beyond the gold market itself.
The US dollar’s reserve dominance is under pressure. With 74% of central bank reserve managers expecting the dollar’s share of global reserves to decline over the next five years and 84% expecting gold’s share to rise, the direction of travel is clear. This is not a forecast of dollar collapse but a gradual, structural diversification away from a single currency dominance that has defined the global monetary system since Bretton Woods.
Central bank buying is creating a new demand floor. At an average of 1,000 tonnes per annum over the past four years, double the 500 tonne average of the preceding decade, central bank demand has become a structural pillar of the gold market. Unlike retail or ETF flows, which can reverse quickly, central bank accumulation is strategic and long term in nature.
Domestic purchase programmes are reshaping supply dynamics. Half of respondents to the WGC survey indicated they would fund new gold purchases through domestic purchase programmes in local currency. This bypasses international spot markets, reducing the supply available to Western institutional investors and potentially altering the traditional price discovery mechanism.
The liquidity risk of gold is often underestimated. IMF guidance on gold in central bank reserves emphasizes that gold’s liquidity is materially less effective than its headline market value suggests. Central banks holding gold in the investment tranche rather than the liquidity tranche are better positioned to absorb its price volatility without compromising their ability to respond to external shocks.
“Central banks remain on course for another strong year of net purchases,” the WGC said, “supported by portfolio diversification.”
For the first half of 2026, net central bank demand totalled 345 tonnes, the lowest half year figure since 2022, reflecting an exceptionally weak first quarter that saw heavy selling by Turkey, Russia and Azerbaijan. The record second quarter was in part a catch-up following that lull.
The Strategic Case
Gold’s appeal to central banks lies in characteristics that few other reserve assets possess. Unlike sovereign bonds, gold carries no issuer risk. Unlike currencies, it is not tied to the economic or fiscal outlook of a single country. Unlike many reserve assets, its role tends to strengthen precisely when uncertainty increases.
“Reserve managers continue to view gold as an important component of official reserves, even though high prices and country specific liquidity needs influence the timing and scale of individual transactions,” the WGC said.
For retail investors globally, the message is increasingly clear: the world’s most sophisticated investors are accumulating gold at a record pace. The question is not whether this demand is sustainable, central banks have made their view clear. The question is whether the broader market has fully appreciated the structural shift underway.
Methodology and Acknowledgments
Methodology Note: The World Gold Council’s 2026 Central Bank Gold Reserves Survey was conducted among 76 central banks between February 5 and May 19, 2026. The sample is “highly representative of the overall central bank community, both geographically and in terms of gold owned.” This marks the ninth edition of the survey and the highest participation on record. Gold price data is sourced from the LBMA PM fix, which is the benchmark used by central banks and institutional investors globally. Central bank reserve data is sourced from official government and central bank publications.
Expert Contributor: Trevor Bester has decades of experience in African trade corridors and resource development. He provided commentary on central bank gold demand trends and market dynamics based on analysis of publicly available data from the World Gold Council and other official sources. His views are his own and do not constitute financial advice.
Data and analysis for this article were sourced from the following organizations:
- World Gold Council, Gold Demand Trends Q2 2026, Central Bank Gold Reserves Survey 2026
- International Monetary Fund, Guidance on gold in central bank reserves (2026)
- Bank of Korea, SEC Filing (SPDR Gold Trust), Domestic Gold Purchase Announcement (August 3, 2026)
- People’s Bank of China, Official Gold Reserves Data
- National Bank of Poland, Governor’s Statement on Gold Reserves
- Bank of Russia
- Central Bank of Turkey
- Central Bank of Uzbekistan
- National Bank of Kazakhstan
- Central Bank of Jordan
- Czech National Bank
- Ghana Gold Board (GoldBod), Domestic Gold Purchase Programme
- Bank of Ghana
- London Bullion Market Association, LBMA PM Gold Price Data
- US Securities and Exchange Commission, EDGAR Database
- Yonhap News Agency
- Ghana News Agency
- TASS
Disclaimer: This article was independently researched and reported. The views expressed are those of the individuals quoted and do not constitute financial advice. The organizations named above provided data and analysis used in the preparation of this article but do not necessarily endorse the views expressed herein. All information is based on publicly available sources and is believed to be accurate as of August 18, 2026.
