Global Central Bank Gold Purchases Hit Record High: 2026 H1 Data Review
According to the latest "2026 Global Gold Demand Trends Report" released by the World Gold Council, the net increase in global central bank gold reserves reached 1,250 tons in the first half of 2026, a 28% increase from the same period in 2025, setting a record for the highest single-quarter increase since 2010. Among them, emerging market countries contributed over 70% of the gold purchases, especially Asian countries such as China, India, Thailand, and Indonesia and Vietnam in Southeast Asia, becoming the main drivers of gold purchases.
Behind this data is the urgent need of global central banks for currency reserve diversification. As geopolitical conflicts intensify and the uncertainty of the US dollar credit system increases, central banks around the world have turned to gold as an important tool to hedge risks. John Reade, Senior Market Analyst at the World Gold Council, pointed out: "The central bank's gold purchases in 2026 are not only short-term hedging needs but also a strategic choice for long-term reserve structure adjustment. It is expected that central bank gold purchases will remain high in the coming years."
Asian Countries Lead Reserve Diversification: Gold Purchase Dynamics in China, India, and Southeast Asia
In Asia, China's central bank gold purchases are particularly noteworthy. In the first half of 2026, China's central bank gold reserves increased from 2,100 tons at the end of 2025 to 2,250 tons, a net increase of 150 tons, the largest single-quarter increase in nearly five years. Analysts believe this is closely related to China's strategy of promoting the internationalization of the RMB and reducing dependence on the US dollar. Li Bo, Vice Governor of the People's Bank of China, said at the 2026 Spring Monetary Policy Meeting: "Gold, as an important part of international reserve assets, helps enhance the credit endorsement of the RMB and strengthen China's voice in the global financial system."
The Reserve Bank of India also increased its gold purchases. In the first half of 2026, it net increased gold by 80 tons, bringing its gold reserves to 800 tons, with the proportion of foreign exchange reserves rising from 15% to 18%. Indian Ministry of Finance officials said that the gold purchases are to cope with domestic inflation pressure and the instability of the international monetary system, while meeting the demand of the domestic gold consumption market.
Among Southeast Asian countries, Indonesia and Vietnam's gold purchases stood out. The Bank of Indonesia net increased gold by 50 tons in the first half of 2026, bringing its gold reserves to 300 tons, accounting for 10% of foreign exchange reserves; the State Bank of Vietnam net increased 30 tons, bringing gold reserves to 150 tons. The main reasons for these countries' gold purchases are to cope with regional geopolitical risks, such as the South China Sea situation and Sino-US trade frictions, while using gold reserves to support the stability of their domestic currencies.
Support for High Gold Price: Resonance Between Central Bank Gold Purchases and Macroeconomic Factors
Global central bank gold purchases have provided strong support for the gold price. In August 2026, the London spot gold price broke through $2,500 per ounce, setting a historical high. Although the Federal Reserve kept interest rates unchanged at the July FOMC meeting, market expectations for a rate cut in September warmed up, leading to a continuous decline in real interest rates and further pushing up the gold price.
In addition to central bank gold purchases, inflation pressure in macroeconomic factors is also an important driver of the gold price rise. In July 2026, the US CPI year-on-year increased by 3.2%, higher than the market expectation of 3.0%, and the core CPI year-on-year increased by 3.8%, showing that inflation is still at a relatively high level. Federal Reserve Chairman Powell said at the press conference after the July FOMC meeting: "The pace of inflation decline is slower than expected, but the conditions for rate cuts are gradually maturing." This statement made the market expect the Federal Reserve to cut rates by 25 basis points in September, and the expectation of declining real interest rates further pushed up the gold price.
Moreover, geopolitical risks are also an important supporting factor for the gold price. In August 2026, the situation in the Strait of Hormuz was tense, and the conflict between Iran and Saudi Arabia escalated, causing crude oil prices to break through $100 per barrel and intensifying market concerns about the energy crisis. As a safe-haven asset, gold attracted a large amount of capital inflow, pushing the gold price to break through the $2,500 mark.
Valuation Recovery of Chinese-Listed Gold Mining Stocks: The Logic of Davis Double Play
Global central bank gold purchases and high gold prices have brought the opportunity of Davis Double Play to Chinese-listed gold mining stocks. Davis Double Play refers to the dual drive of company profit growth and valuation increase, leading to a significant rise in stock prices. In the first half of 2026, the performance of Chinese-listed gold mining stocks generally exceeded expectations, while valuation levels were at historical lows, providing room for stock price increases.
Taking Zijin Mining as an example, the Q2 2026 financial report showed that the company's gold production reached 15 tons, a year-on-year increase of 12%, revenue increased by 18% year-on-year, and net profit increased by 25% year-on-year. Wang Zhenhua, CEO of Zijin Mining, said: "The rise in gold prices and production growth are the main reasons for the company's better-than-expected performance, and it is expected that production will continue to grow in the second half of 2026." The PE (price-to-earnings ratio) of Zijin Mining fell from 15 times at the end of 2025 to 12 times in August 2026, at a historical low, while the rise in gold prices enhanced its profitability, leaving a large room for valuation recovery.
Another Chinese-listed gold mining stock, Shandong Gold, had a gold production of 18 tons in Q2 2026, a year-on-year increase of 15%, revenue increased by 20% year-on-year, and net profit increased by 30% year-on-year. The PE of Shandong Gold fell from 18 times at the end of 2025 to 14 times in August 2026, also in an undervalued state. Institutional investor research on Shandong Gold shows that many fund companies have raised their target prices, believing that the rise in gold prices will promote the company's continuous profit growth, and the valuation is expected to rise to more than 20 times.
The continuous inflow of ETF funds is also an important support for Chinese-listed gold mining stocks. In the first half of 2026, the net inflow of Asian precious metals ETF funds reached $5 billion, of which Chinese-listed gold mining stock ETFs accounted for more than 30%. For example, the holdings of iShares MSCI China Gold Miners ETF (GDM) increased from $2 billion at the end of 2025 to $3.5 billion in August 2026, showing that institutional investors' allocation demand for Chinese-listed gold mining stocks is increasing.
Investment Strategy Recommendations: How to Seize Precious Metals Allocation Opportunities
For investors, the precious metals market still has allocation value. First, global central bank gold purchases will continue to push up the gold price, especially the gold purchase demand of Asian countries, which will provide long-term support for the gold price. Second, the valuation undervaluation of Chinese-listed gold mining stocks is prominent, and the logic of Davis Double Play has not been fully realized, so there is still room for stock price increases.
In terms of specific strategies, it is recommended that investors focus on two types of targets: one is Chinese-listed gold mining stocks with production growth potential, such as Zijin Mining and Shandong Gold, whose production growth will promote profit improvement and valuation recovery; the other is Asian precious metals ETFs, such as iShares MSCI China Gold Miners ETF, through which investors can diversify risks while sharing the rise in gold prices and the improvement in gold mining stock valuations.
It should be noted that the precious metals market still has certain risks. The pace of the Federal Reserve's rate cuts may be slower than expected, leading to a rise in real interest rates and suppressing the gold price; in addition, the uncertainty of geopolitical risks may also cause market volatility. Therefore, investors should remain cautious, reasonably allocate positions, and avoid over-concentration.
Risk Warning
- The pace of the Federal Reserve's rate cuts is slower than expected, real interest rates rise, suppressing the gold price;
- Geopolitical risks intensify, causing market volatility;
- Gold mining stocks' performance is worse than expected, valuation recovery is slow.
