World Gold Council Reports Flat Global Demand Amid India Decline

The World Gold Council reported that global gold demand remained flat year-on-year in the second quarter of 2026, totaling 1,269 tonnes. While gold prices consolidated after hitting record highs earlier in the year, total demand for the first half of 2026 rose 2% to 2,522 tonnes. Growth was primarily driven by central banks and official institutions, which added a net 289 tonnes to their reserves in Q2, representing a 62% year-on-year increase.

In India, gold demand fell 6% year-on-year to 131.4 tonnes during the April-June quarter. High prices, increased customs duties, and a call from Prime Minister Narendra Modi to reduce non-essential gold purchases to protect foreign exchange reserves contributed to the decline. Jewelry demand in India dropped 15% as consumers shifted toward lighter-weight products, though total demand value hit a record ₹1,98,100 crore due to price hikes. Investment demand grew, with bar and coin demand rising 9% and gold ETFs increasing 49%.

Supply remained steady at 1,269 tonnes globally, as mine production increases in Canada and Chile offset a 6% drop in recycling. The council warned that a May import fee hike to 15% in India has increased the risk of smuggling and grey market activity. For the full year, India's gold demand is estimated to be between 650 and 750 tonnes, with the festive and wedding seasons expected to support growth in the second half of 2026.