Global central bank gold purchases were far weaker than initially reported during the first quarter of 2026, according to a World Gold Council (WGC) report highlighted by the Financial Times.
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The WGC said net official gold purchases for Q1 were revised down from an earlier estimate of 244 tonnes to just 57 tonnes, representing a 76% reduction and marking the weakest first-quarter buying level in more than 15 years.
Why the Data Was Revised
The sharp adjustment was made after a significant volume of gold that had previously been classified as official-sector purchases was reallocated to the over-the-counter (OTC) market.
The WGC noted that central bank reporting remains voluntary, making it increasingly difficult to track actual official gold purchases. The challenge is particularly significant in the case of China, which is widely viewed as a major buyer but discloses only part of its gold acquisition activity.
Q2 Buying Rebounded Strongly
While the first quarter was unusually weak, official-sector demand recovered sharply during the second quarter.
According to the report, central banks added 289 tonnes of gold in Q2 2026, roughly five times the revised Q1 total. The rebound was attributed mainly to China and Poland, which were identified as key contributors to the stronger quarter.
Even with the Q2 recovery, overall first-half 2026 central bank demand remained the lowest since 2022, the report said.
Geopolitical Factors Add to Reporting Challenges
The WGC also linked the growing opacity in gold reporting to geopolitical developments following U.S. sanctions on Russia in 2022.
Those sanctions encouraged many developing economies to diversify reserves away from the U.S. dollar, while simultaneously reducing the amount of information they disclose to the International Monetary Fund (IMF).
WGC market strategist John Reade said analysts are increasingly engaged in a “game of cat-and-mouse” as they attempt to identify actual physical gold flows because many sovereign buyers now reveal only a fraction of their transactions.
Middle Eastern Sovereign Funds Entered the Market
The report also pointed to activity among Middle Eastern sovereign wealth funds. According to Reade, some regional funds sold portions of their bullion holdings following disruptions caused by recent conflicts in order to help offset declines in oil and gas revenues.
In addition, Turkey, Russia, and Azerbaijan were identified as net sellers of gold during the first half of 2026.
Why Slower Official Buying Matters
Central banks have become one of the gold market’s most important sources of structural demand, accounting for up to one-third of global second-quarter gold demand, according to the report.
When gold prices weaken, official-sector purchases often absorb excess supply and help create a price floor for the bullion market. A slowdown in that buying activity could therefore reduce an important source of support for gold prices.
The report noted that gold prices had already fallen by around 30% from their January 2026 peaks, making the reduction in official demand particularly significant for market sentiment.
ETF Outflows Also Weighed on Demand
Broader gold demand remained relatively resilient despite the weaker central bank data. The WGC said first-half global gold demand increased 2% year-on-year to about 2,500 tonnes, but overall momentum was held back by continued gold ETF liquidations.
Gold-backed ETFs recorded 45 tonnes of outflows during Q2 alone, equivalent to roughly USD 4 billion, adding further pressure to investment demand.
Frequently Asked Questions (FAQs)
1. Why did the WGC revise Q1 2026 central bank gold purchases lower?
The revision occurred because gold previously believed to have been purchased by central banks was reclassified into the OTC market, reducing the official-sector estimate from 244 tonnes to 57 tonnes.
2. How significant was the decline in Q1 central bank gold buying?
The revised figure represented a 76% drop from the original estimate and marked the lowest first-quarter level in more than 15 years.
3. Which countries helped drive the rebound in Q2 2026?
The WGC said the recovery to 289 tonnes of purchases in Q2 was driven largely by China and Poland.
4. Why has tracking central bank gold purchases become more difficult?
Gold purchase reporting is voluntary, and many sovereign institutions now disclose only part of their transactions. The WGC said this lack of transparency has become more pronounced since 2022.
5. What other factors weighed on gold demand in the first half of 2026?
In addition to weaker official-sector demand, gold ETF outflows of 45 tonnes (about USD 4 billion) during Q2 reduced overall investment momentum, even though total first-half gold demand still rose 2% year-on-year.
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