Central Bank Gold Buying Surges: 321 Tonnes Added in Q3
Central banks ramp up gold buying to 321 tonnes in Q3, driving year-to-date demand to 675 tonnes despite record-high prices.
In a significant move that underscores a global shift in reserve strategies, central banks have aggressively ramped up their central bank gold purchases, acquiring 321 tonnes of the precious metal in the third quarter of 2026. According to the latest report from the World Gold Council (WGC), this surge has pushed the total gold demand from central banks for the year so far to 675 tonnes, marking a 6 per cent increase compared to the previous year.
Defying High Prices
What makes this buying spree particularly notable is that it occurred while gold prices were hitting historic highs. The LBMA (PM) gold price averaged USD 4,262 per ounce during the July-September quarter, a staggering 23 per cent jump year-on-year. This average stands as the third-strongest quarterly average ever recorded.
While central banks were buying in bulk, other sectors felt the pinch of these elevated costs. The WGC noted that high prices acted as a deterrent for retail consumers and traditional investors, leading to a dip in other demand categories.
Mixed Trends in Investment and Jewellery
The investment landscape showed a stark contrast between different types of gold assets:
- Gold ETFs: After experiencing outflows in the second quarter, exchange-traded funds saw a reversal, adding 211 tonnes in Q3. This shift is believed to be driven by mounting anxieties over inflation and fiscal sustainability.
- Bars and Coins: Demand in this segment plummeted by 19 per cent year-on-year to 268 tonnes, as many investors opted to wait for a more stable price trend.
- Jewellery: The jewellery sector suffered the most, with demand falling 17 per cent to 313 tonnes. This represents the weakest third-quarter jewellery demand in the history of the WGC's data series. Interestingly, despite the drop in volume, the total value of jewellery demand actually rose by 2 per cent to USD 43 billion due to the high price per ounce.
The AI Boost in Technology
While luxury and retail demand wavered, the tech sector provided a silver lining. Gold consumption for technology grew by 3 per cent during the quarter. The report highlights that manufacturing requirements linked to artificial intelligence (AI) more than compensated for the impact of high gold prices.
Supply Side: Mine Records and Recycling Slumps
The supply of gold presented a conflicting picture. Gold mine production hit a third-quarter record, rising 3 per cent to 1,071 tonnes. However, the total overall supply actually declined by 1 per cent to 1,369 tonnes.
A major factor in this decline was the slump in recycling. Recycling volumes dropped 8 per cent to 314 tonnes, the lowest level seen in three years, suggesting that owners are holding onto their gold rather than selling it back into the market.
The Road Ahead
Looking toward the future, the World Gold Council expects central bank buying to at least match the levels seen in 2025. While demand for bars, coins, and ETFs is expected to remain resilient, the council warns that jewellery demand may continue to soften as prices remain persistently high. Furthermore, gold recycling is expected to remain largely unresponsive to the current price environment.
In terms of overall value, the first nine months of 2026 have been historic, with year-to-date gold demand reaching a record USD 566 billion, driven primarily by the surge in gold valuations.