With gold prices falling 30% from its Janaury peak, central banks and other official institutions have a net 321 trillion to reserves in the third quarter of the current year. This is 42% higher on an year on year basis and the highest quarterly amount since Q4 2024, while Year-to-date purchases has rose 6% to 675 trillion, according to a report by World Gold Council.
The rising purchases precious metal is primarily driven by portfolio diversification and risk management. The development comes as gold prices continue to fall amid ongoing geopolitical tensions in the Middle East, which has raised oil supply concerns and inflation fears, while dollar strengthens and US Treasury yields rise.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
While insitutions ramped up gold purchases, the total demand for gold has declined 1% year-on-year to 1,369 metric tonnes, when the gold price stood around $4,262/oz. In terms of funds, physically backed gold ETFs turned to inflows in the quarter, marking a reversal from Q2. This remained 6% lower than the strong inflows witnessed in Q3 2025, when holdings surged to a record 4,256 trillion. Over-the-counter and other demand hit 143 trillion, nearly 101 trillion higher from the year ago, which remained below the higher levels withnessed earlier this year.
READ | Can A Bank Refuse To Return Your Gold After You Repay A Loan?
"The third quarter was a mixed bag for gold demand. Gold ETF inflows came roaring back, with geopolitical risk and concerns around fiscal discipline driving institutional interest, in contrast to retail investors who held back amid uncertainty over the gold price outlook. Central Banks remained an important pillar of demand as pronounced buying continued from the official sector," said Louise Street, Senior Markets Analyst at World Gold Council.
According to the report, bar-and-coin demand slipped 19% year-on-year to 268 trillion as investors remained cautious due to a lack of clear direction on the gold price. Hoever, the demand in China rose 7% year-on-year. In addition, jewellery deman fell due to high prices, which fell 17% year-on-year to 313 trillion, marking the weakest third quarter. Notably, consumers continued the trend of switching to lighter and lower-carat pieces. However, the value of global jewellery demand edged higher to US $43 billion.
Technology demand surged 3% year-on-year to 85 trillion, the highest quarterly total since the fourth quarter of 2021. Electronics demand climbed 5% to 72 trillion, driven by AI-related manufacturing.
In total, gold supply was 1% lower year-on-year at 1,369 trillion, with mine production climbing 3%, making third quarter record of 1,071 trillion, while recycling slipped 8% to 314 trillion.
In terms of outlook, Street said, “gold looks finely balanced through to the end of the year. While rising interest rates and mixed inflation expectations present potential headwinds, the combined shadows of geopolitical risk and financial market stress may cause participants to seek stability in gold.”
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.