Global central bank gold purchases hit record high in Q2, gold price stabilizes above $4,100

Central banks continue gold buying spree, net purchases 210 tonnes in Q2

July 26, 2026 - The World Gold Council (WGC) released its latest "Global Gold Demand Trends Report" showing that global central banks net purchased 210 tonnes of gold in Q2 2026, up 12% year-on-year, the highest for that quarter since records began in 2000. This far exceeded market expectations of 180 tonnes, indicating continued strong enthusiasm for gold allocation among central banks.

The report noted that the People's Bank of China increased its gold reserves for the eighth consecutive month, adding 62 tonnes in Q2, bringing total reserves to 2,350 tonnes as of end-June. The Reserve Bank of India added 35 tonnes, reaching a record high of 890 tonnes. The National Bank of Poland added 28 tonnes, bringing total reserves to 380 tonnes. Additionally, central banks in Turkey, Uzbekistan, Kazakhstan and other emerging markets maintained steady purchases. Joe Cavatoni, market strategist at the World Gold Council, said: "Geopolitical uncertainty, reduced reliance on US dollar assets, and the need for reserve asset diversification are the core drivers behind central bank gold purchases."

Gold price stabilizes and rebounds amid multiple factors

Boosted by central bank purchases, international gold prices have stabilized and rebounded after recent volatility. As of the Asian session on July 27, the main gold futures contract on COMEX traded near $4,108 per ounce, up 0.8% from the previous session. Spot gold in London was at $4,095 per ounce, up 0.7%. Silver also followed gold higher, with spot silver at $29.5 per ounce, up 1.2% intraday.

Analysts pointed out that besides central bank buying, renewed expectations of a Fed rate cut are also a key driver. Data from the US Commerce Department on July 25 showed the core PCE price index rose 2.5% year-on-year in June, below the expected 2.6%, the lowest since February 2021. Market pricing of a Fed rate cut in September rose from 55% to 70%. A rate cut cycle is usually positive for gold as it reduces the opportunity cost of holding non-yielding assets.

Gold ETF inflows for four consecutive weeks

Investor sentiment is also improving. According to the World Gold Council, as of July 24, global gold ETFs have recorded net inflows for four consecutive weeks, totaling about 45 tonnes. North America contributed the most, with SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) net inflows of 32 tonnes combined. Asian markets were also active, with China's Huaan Gold ETF and E Fund Gold ETF net inflows of 8 tonnes combined.

"The positive correlation between gold ETF flows and gold prices is strengthening, indicating that retail and institutional investors are returning," said Carsten Menke, analyst at Julius Baer. "Gold is now just one step away from the all-time high of $4,182. If it breaks this level, it could trigger a new wave of buying."

Market outlook: focus on Fed decision and Middle East situation

Looking ahead, market focus this week will be on the Fed's policy meeting on July 29-30. While the market generally expects the Fed to hold rates steady, the dot plot and Powell's comments will provide clues on future policy direction. If clear dovish signals are sent, gold prices could challenge the $4,200 level.

In addition, geopolitical tensions in the Middle East have escalated again. According to a Reuters report on July 26, clashes intensified between Israel and Hezbollah on the border, with Iran issuing warnings. Rising risk aversion also supported gold prices. Goldman Sachs raised its year-end 2026 gold price target to $4,400 in a recent report, saying central bank buying and de-dollarization trends will support gold in the long term.

Technical analysis: key support and resistance

From a technical perspective, on the daily chart, gold has formed a double-bottom support in the $3,950-4,000 area and is now above the $4,100 round number. Short-term resistance is at the previous high of $4,182 (May 20 high), with a break above targeting $4,200. Support below is at $4,050 (20-day moving average) and the psychological $4,000 level. The Relative Strength Index (RSI) is at 57, in the neutral-to-strong range, with no overbought signals.

In terms of operations, analysts suggest investors buy on dips and control positions. For long-term holders, central bank buying and the rate cut cycle provide a safety margin, and they can actively look for pullback opportunities.