On July 29, 2026, the World Gold Council (WGC) released its latest report showing that global gold demand in H1 2026 reached 2,481 tonnes, up 12% year-on-year, setting a record for the period. Q2 demand was 1,255 tonnes, up 18% YoY, far exceeding market expectations. Against the backdrop of persistently high global inflation and heightened geopolitical uncertainty, gold has once again become investors' darling as a traditional safe-haven asset.
1. Persistent inflation highlights gold's hedging properties
Entering 2026, global inflationary pressures did not ease as expected. The eurozone's June harmonized CPI rose 5.2% YoY, with core CPI still at a high 4.8%; the US June core PCE price index rose 2.8% YoY, down from its peak but still above the Fed's 2% target. Energy, food, and service prices continued to climb, eroding consumer purchasing power, and investors flocked to asset preservation channels.
"Gold is one of the few assets that can fully hedge inflation risk," said precious metals analyst Li Ming. "When real interest rates are negative, the opportunity cost of holding gold decreases, making it significantly more attractive." Data shows that global gold ETFs saw net inflows of 320 tonnes in H1 2026, with North America and Europe contributing the most. Large amounts of capital flowed out of stocks and bonds into gold assets.
2. Demonstration effect of central bank gold purchases: accelerated global reserve diversification
Although central bank gold purchases were within market expectations, their persistence and scale provided solid support for gold demand. Global central banks net purchased 230 tonnes of gold in H1 2026, slightly below the 250 tonnes in the same period last year, but still near historical highs. Countries including China, Poland, and Turkey continued to increase their gold reserves, with diversifying foreign exchange reserves and reducing dollar dependence being the main themes.
"Central bank gold purchases not only directly consume supply but also send a signal of confidence to the market," noted renowned precious metals strategist Wang Qiang. "When national institutions are buying gold, ordinary investors naturally follow." This demonstration effect is particularly evident in Asian emerging markets, where demand for gold jewelry and bars in India and Vietnam grew by over 15% YoY.
3. Mining stocks ride the wave: gold miners see strong profit growth
The sustained rise in gold prices directly drove stellar performance in mining companies. London spot gold broke through the $2,400/oz mark in H1, hitting a high of $2,450, up 22% from the start of the year. Major global gold miners saw substantial profit improvements. Asian gold mining stocks performed particularly well: Newmont shares rose 35% in H1, Barrick Gold rose 28%, and Shandong Gold's US ADR surged over 40%.
"Gold mining companies' profitability is highly correlated with their stock prices," said mining stock analyst Zhang Wei. "In an inflationary environment, gold miners can not only earn excess profits through high gold prices but also enhance shareholder returns by expanding production capacity and cutting costs." He suggested that besides directly holding gold, investors could also look at quality mining stocks for leveraged gains. However, mining stocks are more volatile and risk should be noted.
4. Consumption and investment dual drivers: record physical gold demand
Not just institutional investors, ordinary consumers also showed strong enthusiasm for buying gold. Global gold jewelry demand reached 1,050 tonnes in H1 2026, up 8% YoY, with China and India contributing half. Gold bar and coin demand hit 560 tonnes, up 14% YoY, the highest since 2013.
"Now people buy gold not just for weddings or traditions, but more for investment and hedging needs," said a trader at the Shanghai Gold Exchange. "Many clients even treat gold as the base layer of their family asset allocation." At the same time, online gold trading platforms are booming, lowering investment barriers and attracting more young investors.
5. Outlook: gold bull market fundamentals remain intact
Looking ahead to H2, most institutions are bullish on gold continuing its strong run. Rising expectations of a Fed rate cut (CME FedWatch shows a 70% probability of a cut in September), a weakening US dollar index, and unresolved geopolitical conflicts (Russia-Ukraine, Middle East) all support gold prices. The World Gold Council forecasts full-year 2026 gold demand could exceed 5,000 tonnes, another record high.
However, investors should be wary of short-term risks. Rapid price gains may trigger profit-taking, and if inflation falls more than expected, delaying Fed rate cuts, gold could come under pressure. But overall, as long as the macroeconomic environment remains unchanged, gold's safe-haven and hedging logic stays solid.
"Don't try to guess the top of gold prices," advised veteran investor Chen Long. "For ordinary investors, dollar-cost averaging into gold ETFs or allocating physical gold bars are simple and effective ways to fight inflation. Hold for the long term, and time will tell."
