Global Central Bank Gold Reserves Hit Record Increase in H1 2026
According to the latest "Q2 2026 Global Gold Demand Trends Report" released by the World Gold Council (WGC), net gold purchases by global central banks reached a record 483 tonnes in the first half of 2026, a 12% increase compared to the same period in 2025. The People's Bank of China, the National Bank of Poland, and the Reserve Bank of India were the largest buyers, increasing their holdings by 98 tonnes, 62 tonnes, and 55 tonnes respectively. This data reaffirms central banks' long-term confidence in gold as a strategic reserve asset.
Asian Central Bank Buying Dominates Global Trend
Analysis shows that Asian central banks accounted for nearly 60% of global purchases in H1 2026. The People's Bank of China increased its gold reserves for the 18th consecutive month, bringing the total to 2,312 tonnes and raising its share of foreign exchange reserves from 3.2% in 2022 to 5.8%. National Bank of Poland Governor Adam Glapiński stated recently that the bank plans to increase the share of gold reserves to over 20% by 2027. The Reserve Bank of India, through its diversification strategy, has raised its gold reserves to a record high of 856 tonnes.
The chief analyst at TransOcean Gold Institute noted: "Central bank gold buying has shifted from 'emergency hedging' to 'active allocation.' Against a backdrop of global de-dollarization trends and heightened geopolitical uncertainty, gold's strategic value as an asset free from sovereign credit risk is being reassessed. Asian economies are particularly active, providing long-term support for gold prices."
Fed Rate Cut Expectations Boost Gold Prices, Undervalued Asian Gold Miners Stand Out
Although gold prices experienced a brief correction in H1 2026, market expectations for a Fed rate cut in September have risen from 35% in June to 72% as US inflation data continues to ease. The CME FedWatch Tool shows that federal funds rate futures are pricing in a probability exceeding 70% for a 25-basis-point cut in September. Goldman Sachs, in its latest research report, expects the Fed to begin a rate-cutting cycle in Q4 2026, with cumulative cuts of 125 basis points by the end of 2027.
Benefiting from elevated gold prices and rate cut expectations, the profitability of global gold mining companies continues to improve. However, valuations of Asian gold mining stocks remain at historical lows. As of August 6, 2026, the MSCI Asia Gold Mining Index had a price-to-earnings ratio of just 12.3x, a discount of nearly 40% compared to North American peers. Hong Kong-listed valuations of China-concept gold miners such as Shandong Gold, Zhaojin Mining, and Zijin Mining are all below the global industry average.
Institutions Intensively Research China-Concept Gold Miners, Raise Target Prices
Recently, multiple international investment banks have been intensively researching Asian gold mining companies. UBS released a report in late July, raising its target price for Shandong Gold H-shares from HK$21.5 to HK$26.8, maintaining a "Buy" rating, citing better-than-expected production growth and significant cost control achievements. Morgan Stanley initiated coverage on Zhaojin Mining with an "Overweight" rating and a target price of HK$14.2, believing its overseas mine expansion will bring production flexibility.
Furthermore, BlackRock's Global Mining Fund increased its holdings in Zijing Mining and Barrick Gold in Q2 2026. A BlackRock fund manager stated: "Our allocation logic for gold mining stocks is based on two points: first, gold prices still have upside potential driven by central bank buying and rate cut expectations; second, the valuations of Asian miners are attractive, especially China-concept stocks, whose dividend yields are generally above 4%, offering defensive value."
Gold-Silver Ratio Falls Below 70, Silver Industrial Demand Becomes New Focus
Notably, the global gold-silver ratio fell below the 70 mark in early August 2026, hitting a two-year low. Silver ETFs saw net inflows for six consecutive months, with the iShares Silver Trust (SLV) adding 320 tonnes in July alone. On the industrial demand side, silver usage in the photovoltaic industry is expected to grow 12% in 2026, while demand in the 5G communication sector is projected to rise 8%, potentially widening the supply-demand deficit to 6,500 tonnes.
TransOcean Gold Institute analysis suggests that the rapid decline in the gold-silver ratio reflects a market repricing of silver's industrial attributes. Driven by both the energy transition and technological upgrades, the elasticity of silver's industrial demand may surpass gold's financial attributes, providing additional valuation support for silver-related mining stocks.
Risk Warnings and Investment Outlook
Despite the favorable long-term trend, the following risks warrant attention in the short term: first, stronger-than-expected US economic data could delay rate cuts; second, the pace of central bank gold buying may slow if gold prices become too high; third, a periodic strengthening of the US dollar index could pressure precious metal prices. However, from an asset allocation perspective, Asian gold mining stocks offer a high margin of safety and upside potential at current valuation levels.
TransOcean Gold Institute recommends investors focus on the following targets:
- Shandong Gold (1787.HK): Domestic production leader with overseas mines about to commence production, targeting a 15% output increase in 2026;
- Zhaojin Mining (1818.HK): Accelerating overseas resource expansion, with gold reserves up 22% year-on-year;
- Zijin Mining (2899.HK): Multi-metal portfolio with significant copper-gold synergy, valued at only 10x PE;
- Silver ETF (SLV): Benefits from industrial demand growth and gold-silver ratio recovery.
Overall, record-high central bank gold purchases provide a solid floor for gold prices, the Fed rate-cutting cycle is expected to begin in late 2026, and the undervaluation of Asian gold mining stocks is attracting global capital inflows. TransOcean Gold Institute maintains an "Overweight" rating on the precious metals sector and advises investors to accumulate quality targets on dips.
