Central banks increased their gold purchases by 42% in the third quarter of 2026, helping sustain global demand close to last year’s record levels as investors continued turning to the precious metal amid economic uncertainty and concerns over inflation.
Net central bank purchases reached 321.2 tonnes during the quarter, up from 226.3 tonnes in the same period last year, taking cumulative purchases for the first nine months to 675 tonnes, according to the World Gold Council’s (WGC) latest Gold Demand Trends report.
By Ryan Chigoche
The stronger buying comes as gold maintains its appeal among institutional investors and reserve managers, even as elevated prices begin to weigh on traditional jewellery consumption and physical investment by retail buyers.
Global gold demand, including over-the-counter (OTC) transactions, reached 1,369 tonnes in the quarter, marginally below the corresponding period last year. However, cumulative demand for the first nine months stood at 3,881 tonnes, almost matching the 3,884 tonnes recorded during the same period in 2025.
In value terms, year-to-date demand reached a record US$566 billion, reflecting the significant increase in gold prices.
The World Gold Council attributed the stronger investment interest partly to mounting concerns over fiscal sustainability and inflation, which supported renewed inflows into physically backed gold exchange-traded funds (ETFs).
ETFs attracted 211 tonnes during the quarter, reversing the outflows recorded in the second quarter and pushing global holdings to a record 4,256 tonnes. The inflows generated a record US$31 billion in quarterly investment.
However, demand for bars and coins moved in the opposite direction, declining 19% year-on-year to 268 tonnes as retail investors adopted a more cautious approach while waiting for clearer price direction.
The contrasting investment trends highlight the growing importance of institutional flows and central bank purchases in supporting the gold market, particularly as high prices make physical purchases increasingly expensive for individual consumers.
Gold prices averaged US$4,262 an ounce during the quarter, according to the London Bullion Market Association (LBMA), representing a 23% increase from the corresponding period last year.
The price environment continued to put pressure on jewellery consumption, which fell 17% year-on-year to 313 tonnes, the weakest third-quarter performance in the WGC’s data series dating back to 2000.
Consumers across most markets increasingly opted for lighter, smaller and lower-carat jewellery as they adjusted to the higher cost of gold. Despite the decline in volumes, the value of jewellery demand edged up 2% to US$43 billion.
On the production side, global gold mine output increased 3% year-on-year to 1,071 tonnes, setting a new third-quarter record.
Zimbabwe’s gold sector is also operating against this elevated price environment, with deliveries to Fidelity Gold Refinery reaching 35.88 tonnes in the nine months to September, an 8.8% increase from 32.98 tonnes during the corresponding period last year.
The performance represents about 72% of the country’s 50-tonne annual target and puts the sector within reach of surpassing last year’s record output of 46.7 tonnes.
Artisanal and small-scale miners accounted for 25.78 tonnes, nearly 72% of deliveries, underlining their importance to national gold production. While the global surge in investment and central bank purchases does not necessarily translate into direct demand for Zimbabwean gold, the sustained international price strength provides a favourable market backdrop for local producers and reinforces the importance of maintaining production growth from both small- and large-scale operations.
The increase in mined production was insufficient to lift overall supply, which declined 1% to 1,369 tonnes as recycling volumes fell 8% to 314 tonnes, their lowest quarterly level since the fourth quarter of 2023.
The weaker recycling response suggests that high gold prices have not yet encouraged a substantial release of previously held gold into the market.
Technology demand provided another source of support, rising 3% year-on-year to 85 tonnes, driven largely by increased gold consumption in electronics manufacturing linked to artificial intelligence infrastructure.
Electronics demand grew 5% to 72.5 tonnes, its highest quarterly level since the fourth quarter of 2017, although other industrial applications remained under pressure from material substitution and efforts to reduce gold usage.
Looking ahead, the World Gold Council expects investment demand to remain the main driver of growth in 2026, with annual investment demand projected to finish around 200 tonnes above 2025 levels.
Central bank purchases are also expected to at least match last year’s levels following stronger-than-anticipated buying during the second and third quarters.
However, the outlook remains subject to competing market forces, with higher interest rates, bond yields and a stronger US dollar potentially limiting investment appetite, while geopolitical tensions, inflation risks and concerns over government finances could sustain demand.
For producers, the combination of strong investment demand and limited growth in overall supply remains an important feature of the gold market, although the extent to which these conditions translate into further price support will depend on developments in the global economy.
