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On July 31, the latest quarterly report from the World Gold Council (WGC) showed global central bank gold buying continued to climb in H1 2026, with net purchases reaching 98 tonnes in June alone, up 35% year-on-year. Asia-Pacific central banks contributed over 60% of the total. The People's Bank of China has increased gold reserves for nine consecutive months, while central banks in India, Singapore and South Korea also added positions. As a result, spot gold held above $2,450, silver stabilized near $32, and the precious metals market showed a broad recovery.
Central bank gold buying: from 'safe haven' to 'strategic allocation'
This round of central bank buying is not a short-term move. Since 2022, global central banks have remained net buyers for a fifth consecutive year, with cumulative additions exceeding 4,000 tonnes. Since 2026, frequent geopolitical risks and challenges to the US dollar credit system have prompted more emerging-market central banks to view gold as a 'ballast' for their foreign exchange reserves. The WGC's chief market strategist noted that gold currently accounts for only 9.8% of global central bank reserves on average, far below the 20%+ level in developed economies, implying ample room for emerging-market central banks to increase allocation.
Take China as an example. As of end-June 2026, the People's Bank of China held 2,245 tonnes of gold, accounting for 5.2% of its total forex reserves, up nearly 1.5 percentage points from 2022. Though the absolute scale is not small, the ratio remains low compared with the US (about 8,000 tonnes) and European countries. Industry insiders believe the central bank's rational pace of accumulation reflects both recognition of gold's long-term value and consideration for the safety of forex reserves.
Asia-Pacific demand surges, jewelry and investment drive growth
Apart from central banks, physical gold consumption in Asia-Pacific also saw a clear recovery. The report showed Q2 2026 jewelry demand in the region rose 18% year-on-year. India, driven by wedding season and traditional festivals, saw demand reach 148 tonnes, a five-year high. In China, jewelry demand also grew moderately, supported by the 'self-pleasing' consumption concept among younger buyers. Meanwhile, gold coins and bars attracted strong demand amid inflation expectations, with Asia-Pacific total gold investment in H1 surging 32% year-on-year. 'Asia-Pacific buyers have become both the largest demand source and price takers,' an industry analyst commented.
Silver benefits from 'gold-silver linkage' and industrial demand
Driven by gold's strong performance, silver prices also showed higher elasticity. On July 31, spot silver traded around $32.1/oz, with year-to-date gains exceeding gold. Besides the 'spillover effect' of higher gold prices, silver's industrial attributes cannot be ignored—strong demand from photovoltaic modules, 5G equipment and electric vehicles pushed silver industrial consumption up 11% year-on-year in H1 2026, marking a fourth consecutive year of supply-demand deficit. It is estimated that the global silver supply-demand deficit will widen to 150 million ounces in 2026, providing solid medium-term support for silver prices.
Outlook: gold-silver ratio still has room to recover
Regarding future trends, many institutions remain cautiously optimistic. Goldman Sachs' latest report raised its end-2026 gold price target to $2,600, citing relentless central bank buying and expectations that two Fed rate cuts this year will push real interest rates lower. UBS is more bullish on silver, believing that if the gold-silver ratio reverts from the current high of 70 times toward 60 times, silver will gain extra momentum.
However, some analysts warned that gold has entered overbought territory in the short term. If US nonfarm payrolls beat expectations strongly, gold and silver may see a technical correction. But in the medium to long term, central bank buying provides a floor for the precious metals market, and a deep pullback offers a good entry opportunity. For ordinary investors, participating in small batches through gold ETFs or accumulation plans remains a prudent strategy.
In summary, with Asia-Pacific central bank buying and physical demand both strengthening, the precious metals market is entering a new structural uptrend. Every fluctuation in real-time gold and silver prices underscores the irreplaceable role of this ancient metal in the modern financial system.
