Central bank gold buying jumps 42% in Q3 as high prices hit jewellery demand, WGC says

The split in demand matters for price support: central banks tend to buy steadily rather than chase prices, so their stepped-up purchases act as a floor under gold in a way retail demand cannot. The weakness in jewellery and bar and coin buying shows gold’s rally has relied more on institutional and official money than on households, leaving it more exposed if fund inflows reverse. The near-collapse in recycling at these prices is notable, as owners appear to be holding gold rather than selling, which tightens available supply. Investors should weigh the council’s upbeat outlook against its position as an industry body funded by producers.---Earlier:Gold trims gains after overnight strikes on Iran as the focus turns to the US midterm elections--- Central banks are buying gold faster than ever while households balk at the price, and that split is now doing much of the work holding up demand.Summary:Central banks bought about 320 tonnes in Q3, up 42% on the year, and around 675 tonnes so far in 2026Total demand was about 1,370 tonnes, down 1%, with year-to-date demand level with 2025’s recordJewellery consumption fell 17% to the weakest third quarter in the series, though spending rose 2%Bar and coin demand fell 19%, while ETFs took in about 210 tonnesMine output hit a Q3 record, while recycling fell to a three-year lowGold averaged around $4,260/oz, up 23% on the year Central banks stepped up their gold purchases sharply in the third quarter, offsetting a slump in jewellery and retail investment demand as high prices weighed on consumers, according to the World Gold Council.The industry body, which is funded by gold miners, published its quarterly Gold Demand Trends report. It estimated that central banks bought about 320 tonnes in the three months to September, up 42% from a year earlier. That took their purchases for the year so far to around 675 tonnes, 6% above the same period of 2025.Total demand, including over-the-counter trading, was roughly 1,370 tonnes, down 1% on the year. Year-to-date demand of about 3,880 tonnes is level with 2025’s record pace, and its value reached a record of around $566bn. Gold averaged around $4,260 an ounce in the quarter, up 23% on the year and the third-highest quarterly average on record.High prices took their toll on price-sensitive buyers. Jewellery consumption fell 17% to about 310 tonnes, the weakest third quarter in the council’s data series. Spending on jewellery still rose 2% to around $43bn, as buyers paid more for less metal. Demand for bars and coins dropped 19% to about 270 tonnes.Exchange-traded funds provided some support, taking in about 210 tonnes and reversing outflows in the second quarter, though inflows were 6% lower than a year earlier. Overall investment demand, combining funds, bars and coins, fell 14%.On the supply side, mine production rose 3% to a third-quarter record of about 1,070 tonnes, while recycling fell 8% to a three-year low. The council said recycling has stayed largely unresponsive to high prices. Technology demand rose 3%, helped by AI-related electronics manufacturing.Looking ahead, the council expects central bank buying for 2026 to at least match last year’s level. It sees investment demand remaining resilient, jewellery volumes continuing to soften, and only modest growth in supply, coming mainly from mines. This article was written by Eamonn Sheridan at investinglive.com.