The recently released World Gold Council report titled ‘Gold Demand Trends: Q2 2026’ provides some interesting data-driven insights for investors. The report shows that the demand for jewellery and gold ETFs fell globally during April-June 2026 (Q2’26). However, gold buying by central banks surged 411% q-o-q in Q2’26.
This article further explains the three trends with data and inputs from the WGC report.
Gold jewellery demand drops
The global demand for gold jewellery dropped 5% q-o-q to 278.2t in Q2’26. It also fell 17% y-o-y from 335.3t in Q2’25. However, consumer spending on gold jewelleries remained resilient in many markets. Moreover, consumers continued to adapt through lighter-weight jewellery, old-for-new exchanges, and a growing preference for lower-premium investment products.
In India, jewellery demand fell 15% y-o-y from 88.8t in Q2’25 to 75.1t in Q2’26.
“Global jewellery demand remained under pressure in Q2, falling to 278t as elevated prices continued to constrain affordability, and encouraged consumers to reduce purchase weights. The weakness was broad-based, with China and India again accounting for much of the decline,” the report said.
The report said that in India, the quarter was characterised by two contrasting phases:
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Jewellery demand received support from Akshaya Tritiya and wedding-related buying in April, while the correction in gold prices from earlier peaks also helped improve consumer sentiment.
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Conditions weakened from mid-May through mid-June, due to ‘Adhik Maas’, the sharp hike in import duty from 6% to 15%, and a series of government measures aimed at moderating gold imports, including a direct appeal from Prime Minister Modi to avoid buying gold.
“Consumers continued to adapt to high prices through product substitution. Demand increasingly gravitated towards lighter-weight jewellery, while organised retailers continued to benefit from growing sales of studded jewellery and lower-carat products. These trends were particularly evident among larger chain stores, whose customer base is more heavily weighted towards urban consumers,” the report said.
Further, a divergence between organised and traditional retail channels was also evident.
“While larger retailers continue to expand inventories and increase their network of stores, many independent and mid-sized jewellers find themselves more exposed to the weakness in traditional 22k jewellery demand.” the report said.
“Nevertheless, consumer affinity towards gold jewellery appears intact and spending remained resilient despite lower tonnage volumes,” it added.
In July, however, jewellers reported stronger activity as consumers took advantage of lower prices ahead of the forthcoming wedding season. “This seasonal demand should provide further support in H2, although the monsoon and outlook for rural incomes remain important variables.”
| Category | Q2’25 | Q3’25 | Q4’25 | Q1’26 | Q2’26 | q/q % Change | y/y % Change |
|---|---|---|---|---|---|---|---|
| Jewellery Consumption | 335.3 | 375.6 | 434.8 | 294.2 | 278.2 | -5% | -17% |
| ETFs & Similar Products | 171.1 | 225.7 | 175.7 | 62.4 | -44.8 | – | – |
| Central Banks & Other Institutions | 177.9 | 226.3 | 208.2 | 56.5 | 288.9 | 411% | 62% |
Quarterly gold demand by category in tonnes. Source: World Gold Council’s ‘Gold Demand Trends: Q2 2026’
Central bank buying surges
“Central banks remain on course for another strong year of net purchases. The structural case for gold – diversification, crisis performance, and protection against geopolitical and financial risk – remains well established, and the Q2 recovery is more consistent with the positive intentions captured in our latest Central Bank Gold Reserves survey. As the Q2 rebound did not fully reverse the revised Q1 demand weakness, we expect annual demand to finish below the 2025 total,” the report said.
It added that tactical sales linked to liquidity needs or foreign-exchange management remain possible, but these should be viewed against an enduring strategic trend: “reserve managers continue to see gold as a long-term diversifier rather than a short-term trade.”
Indian Global ETF demand increased, despite global fall
The global gold ETF demand fell to -44.8 in Q2’26 from 62.4 in Q1’25.
“Physically-backed gold ETFs reversed course in Q2 due 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,” the report said.
Asian market suffered the worst monthly outflow on record in June, despite recording a standout H1. “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.”
However, Indian funds bucked the regional trend, adding 4t during the quarter as local investors treated the price correction as an entry opportunity.
Going forward, the WGC expects investment to remain the primary driver of demand growth through the second half of 2026, supported increasingly by over-the-counter activity and Asian buying. Central banks also remain on course for another strong year, although likely lower than 2025.
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