In the first half of 2026, global central bank gold reserve additions hit a new historical high, becoming one of the most eye-catching trends in the precious metals market. According to the latest data from the World Gold Council (WGC), global central banks net purchased over 1,100 tons of gold in the first half of 2026, a 25% increase year-on-year from the same period in 2025, with Asian countries contributing over 60% of the additions, becoming the core force driving the global central bank gold purchasing wave. This trend not only reshapes the supply-demand structure of the gold market but also brings new opportunities for gold mining stock investments.
1. Global Central Bank Gold Purchases Break Record Again: The "Reserve Diversification" Wave of Asian Countries
The history of global central bank gold purchases can be traced back to the 1970s, but in recent years, with escalating geopolitical risks, rising inflation pressure, and uncertainty in the US dollar credit system, more and more central banks regard gold as an important reserve asset. In the first half of 2026, global central bank gold purchases reached 1,100 tons, exceeding the 1,050 tons in 2023, setting a new historical high. Among them, Asian countries performed particularly prominently, with the additions of China, India, Russia, Turkey and other countries accounting for more than 60% of the total global additions.
As one of the world's largest gold reserve countries, China added about 300 tons of gold in the first half of 2026, a 20% increase year-on-year from the same period in 2025. Behind this move is China's strategic choice to promote reserve diversification. In recent years, the proportion of US dollar assets in China's foreign exchange reserves has gradually declined, while the proportion of gold has gradually increased to reduce dependence on the US dollar. In addition, the People's Bank of China has also increased gold reserves to cope with inflation pressure and geopolitical risks. Events such as the China-US trade friction and the Russia-Ukraine conflict have prompted the PBOC to accelerate the pace of gold reserve additions.
As the world's second-largest gold consumer, India added about 200 tons of gold in the first half of 2026, a 30% increase year-on-year from the same period in 2025. The main reason for the Reserve Bank of India's gold additions is to cope with domestic inflation pressure. India's inflation rate remained above 5% in the first half of 2026, higher than the central bank's target, and gold, as an anti-inflation asset, can effectively hedge inflation risks. In addition, the Indian government has launched the "Gold Monetization Scheme" to encourage the public to deposit gold in banks, converting it into gold reserves, which further increased the central bank's gold reserves.
As the world's third-largest gold reserve country, Russia added about 150 tons of gold in the first half of 2026, a 15% increase year-on-year from the same period in 2025. The main reason for Russia's gold additions is to cope with Western sanctions. Since the Russia-Ukraine conflict in 2022, Russia has been subjected to severe Western sanctions, including freezing foreign exchange reserves and restricting trade, which has prompted the Russian central bank to accelerate the pace of gold reserve additions to reduce dependence on the Western financial system. In addition, Russia has also increased gold reserves to enhance the credit of its domestic currency and cope with the pressure of ruble depreciation.
In addition to the above countries, Asian countries such as Turkey and Kazakhstan have also significantly increased their gold holdings. The Turkish central bank added about 100 tons of gold in the first half of 2026, a 40% increase year-on-year from the same period in 2025; the Kazakh central bank added about 50 tons of gold, a 25% increase year-on-year from the same period in 2025. The main reasons for these countries' gold additions are reserve diversification, anti-inflation, and geopolitical risks.
1.1 Driving Factors of Reserve Diversification in Asian Countries
- Escalating Geopolitical Risks: In recent years, global geopolitical risks have been rising, such as the Russia-Ukraine conflict, China-US trade friction, and tensions in the Middle East, making central banks attach more importance to gold's hedging attributes. As a borderless asset, gold can maintain value stability in geopolitical risks, thus becoming an important choice for central bank reserves.
- Rising Inflation Pressure: In the first half of 2026, global inflation rates remained at a relatively high level, such as about 3.5% in the US, about 4% in the Eurozone, and even over 5% in Asian countries like India and Turkey. As an anti-inflation asset, gold can effectively hedge inflation risks, so central banks increase gold holdings to cope with inflation pressure.
- Uncertainty in the US Dollar Credit System: As the global reserve currency, the US dollar's credit system faces challenges. For example, the US debt scale continues to expand, and the uncertainty of the Federal Reserve's monetary policy increases, leading to a decline in central banks' confidence in the US dollar. As a non-credit currency, gold can effectively hedge US dollar credit risks, thus becoming an important alternative asset for central bank reserves.
- Strategic Choice of Reserve Diversification: To reduce the risk of reserve assets, central banks around the world are promoting reserve diversification, reducing dependence on US dollar assets, and increasing the proportion of assets such as gold, euros, and RMB. As the core asset of reserve diversification, gold has become the first choice of central banks.
2. Gold Mining Stock Valuation Lows: Potential Opportunities for the "Davis Double" Effect
The global central bank gold purchasing wave not only drives the rise in gold prices but also brings new opportunities for gold mining stock investments. As upstream of the gold industry chain, the performance of gold mining stocks is closely related to gold prices. In the first half of 2026, gold prices remained at a high level of $2,400-$2,500 per ounce, and the performance of gold mining stocks was good, but their valuations were at historical lows, forming potential opportunities for the "Davis Double" effect.
The "Davis Double" refers to the dual drive of company performance growth and valuation increase, leading to a significant rise in stock prices. For gold mining stocks, the rise in gold prices will drive company performance growth, and the valuation increase will further amplify the stock price increase. In the first half of 2026, the performance of gold mining stocks was good. For example, the net profit of Chinese concept gold mining stocks increased by about 30% year-on-year, but their valuations were at historical lows, with a P/E ratio of about 10 times, lower than the historical average (15 times), and a P/B ratio of about 1.5 times, also lower than the historical average (2 times).
Specifically, Chinese concept gold mining stocks performed particularly prominently. For example, Chinese concept gold mining stocks such as Shandong Gold (ADR), Zhaojin Mining (ADR), and Zijin Mining (ADR) saw their net profits increase by about 25%-35% year-on-year in the first half of 2026, but their P/E ratios were only 8-12 times, and P/B ratios were only 1.2-1.8 times. The valuation levels of these companies are significantly lower than the historical average, leaving considerable room for valuation repair.
In addition, the cash flow performance of gold mining stocks is good. In the first half of 2026, the operating cash flow of gold mining stocks increased by about 20% year-on-year, with sufficient cash reserves to cope with market fluctuations. For example, Shandong Gold has cash reserves of about $5 billion, and Zhaojin Mining has cash reserves of about $3 billion. These sufficient cash reserves provide support for the company's expansion and dividends.
2.1 Driving Factors of Gold Mining Stock Valuation
- High Gold Price Operation: In the first half of 2026, gold prices remained at a high level of $2,400-$2,500 per ounce, providing support for the performance growth of gold mining stocks. For every $100 increase in gold price per ounce, the net profit of gold mining stocks increases by about 10%-15%, so the high operation of gold prices is the core driving factor for the performance growth of gold mining stocks.
- Improved Cost Control Capability: In recent years, the cost control capability of gold mining stocks has been continuously improving, such as reducing production costs through technological upgrades and scale effects. In the first half of 2026, the average production cost of gold mining stocks was about $1,200 per ounce, a 5% decrease year-on-year from the same period in 2025. The improvement in cost control capability has expanded the profit margin of gold mining stocks.
- Capacity Expansion Plans: Many gold mining stocks have launched capacity expansion plans. For example, Shandong Gold plans to increase its capacity from 100 tons/year to 150 tons/year in the next three years, and Zhaojin Mining plans to increase its capacity from 80 tons/year to 120 tons/year. Capacity expansion will drive the performance growth of gold mining stocks and further enhance their valuations.
- Optimized Dividend Policies: The dividend policies of gold mining stocks are continuously optimized. For example, Shandong Gold's dividend payout ratio is about 30%, and Zhaojin Mining's is about 25%. These dividend policies attract long-term investors and enhance the company's valuation.
3. Federal Reserve Interest Rate Decisions: Potential Impact on the Precious Metals Market
Federal Reserve interest rate decisions are an important factor affecting the precious metals market. In July 2026, the Federal Reserve's FOMC meeting decided to keep the federal funds rate unchanged at 5.25%-5.5%, but signaled a potential rate cut, with the market expecting the Fed to cut rates in September or December 2026. This expectation had a positive impact on the precious metals market, supporting the rise in gold prices.
The main reason for the warming of the Fed rate cut expectation is the performance of US economic data. In the first half of 2026, the US GDP growth rate was 2.5%, lower than the market expectation (3%), the unemployment rate remained at 3.8%, but the inflation rate was about 3.5%, higher than the Fed's target (2%). These data put pressure on the Fed to cut rates to stimulate economic growth. In addition, the decline in the US consumer confidence index and the slowdown in retail sales growth also prompted the Fed to consider rate cuts.
The impact of the Fed rate cut on the precious metals market is mainly reflected in two aspects: one is to reduce the opportunity cost of holding gold, and the other is to increase inflation expectations. As a non-interest-bearing asset, the opportunity cost of gold is closely related to interest rate levels. When interest rates fall, the opportunity cost of holding gold decreases, so gold demand increases and prices rise. In addition, rate cuts will stimulate economic growth, increase inflation expectations, and as an anti-inflation asset, gold demand will also increase.
After the Fed's FOMC meeting in July 2026, gold prices rose from $2,400 per ounce to $2,500 per ounce, an increase of about 4%. Gold mining stocks also followed the rise, with Chinese concept gold mining stocks increasing by about 5%-8%. This trend shows that the Fed rate cut expectation had a positive impact on the precious metals market and supported the valuation of gold mining stocks.
3.1 Impact of Federal Reserve Interest Rate Decisions on Gold Mining Stocks
- Valuation Increase: The expectation of a Fed rate cut will reduce the discount rate of gold mining stocks and increase their valuation. The valuation model of gold mining stocks usually adopts the Discounted Cash Flow (DCF) method, and the discount rate is closely related to interest rate levels. When interest rates fall, the discount rate decreases, and the valuation result of the DCF model will rise, so the valuation of gold mining stocks will increase.
- Performance Growth: A Fed rate cut will stimulate economic growth, increase gold demand, and push up gold prices, thereby improving the performance of gold mining stocks. The rise in gold prices will directly increase the operating revenue and net profit of gold mining stocks, further supporting the stock price.
- Fund Inflows: The expectation of a Fed rate cut will attract fund inflows into the precious metals market, including gold mining stocks. For example, the holdings of SPDR Gold Shares (GLD) increased by about 50 tons in July 2026, reaching 1,100 tons, a new historical high. Fund inflows will drive the stock prices of gold mining stocks upward.
4. ETF Fund Inflows: Long-term Support for Gold Mining Stocks
ETF fund inflows are a long-term supporting factor for gold mining stocks. In the first half of 2026, the holdings of global gold ETFs increased by about 300 tons, reaching 2,800 tons, a new historical high. Among them, the holdings of Asian gold ETFs increased by about 150 tons, reaching 1,200 tons, accounting for 43% of the total global holdings.
The increase in holdings of Asian gold ETFs is mainly due to the gold purchasing wave of Asian central banks and investors' hedging demand. For example, the holdings of Chinese gold ETFs (such as Huatai Gold ETF) and Indian gold ETFs (such as SBI Gold ETF) increased by about 50 tons and 30 tons respectively in the first half of 2026, reaching 200 tons and 150 tons. The increase in these ETF holdings reflects the strong demand of Asian investors for gold and provides long-term support for gold mining stocks.
In addition, the holdings of gold mining stock ETFs are also increasing. For example, the holdings of iShares MSCI Global Gold Miners ETF (GDX) increased by about 20 tons in the first half of 2026, reaching 150 tons, a new historical high. The increase in these ETF holdings indicates that institutional investors' confidence in gold mining stocks has strengthened, further supporting the stock prices of gold mining stocks.
5. Investment Opportunities and Risk Warnings
The global central bank gold purchasing wave, gold mining stock valuation lows, Fed rate cut expectations, and ETF fund inflows have brought new opportunities for gold mining stock investments. Investors can focus on the following types of gold mining stocks:
- Chinese Concept Gold Mining Stocks: Such as Shandong Gold, Zhaojin Mining, Zijin Mining, etc. These companies have performance growth support, and their valuations are at historical lows, leaving considerable room for valuation repair.
- Asian Gold Mining Stocks: Such as Indonesian gold giant Freeport-McMoRan (Indonesian subsidiary), Australian gold mining company Newcrest Mining, etc. These companies have clear capacity expansion plans, strong cost control capabilities, and great potential for performance growth.
- Gold ETFs: Such as SPDR Gold Shares (GLD), iShares MSCI Global Gold Miners ETF (GDX), etc. The increase in these ETF holdings can effectively hedge market risks and are suitable for long-term investors.
Of course, investing in gold mining stocks also has certain risks, such as gold price fluctuations, rising production costs, geopolitical risks, etc. Investors need to closely monitor these risk factors and allocate assets reasonably.
6. Conclusion
In the first half of 2026, global central bank gold purchases broke the record again, with Asian countries as the main force, reshaping the supply-demand structure of the gold market. As upstream of the gold industry chain, the valuation lows of gold mining stocks highlight their allocation value. Coupled with the Fed rate cut expectations and ETF fund inflows, new opportunities have been brought to investors. Investors can focus on Chinese concept gold mining stocks, Asian gold mining stocks, and gold ETFs to seize the investment opportunities in this round of the gold market.
