Article Summary: A latest report from the World Gold Council shows global central bank gold purchases hit a record high in H1 2026, with Asian central banks particularly active, pushing gold above $2,400/oz. Meanwhile, silver ETF holdings fell due to weak industrial demand from photovoltaics and electronics, leading to a clear price divergence. This article analyzes structural changes and investment opportunities in the precious metals market.
On July 28, 2026, the latest report from the World Gold Council showed that global central bank net gold purchases in the first half of 2026 reached a record high of 483 tons, up 12% year-on-year. Asian central banks were the main drivers—China, India, Singapore, and Thailand increased their gold reserves for six consecutive months, with the People's Bank of China alone adding 128 tons, pushing its official gold reserves above 2,500 tons. Supported by this sustained buying, international gold prices once again breached $2,400 per ounce during the Asian session on July 28 and fluctuated narrowly in the $2,405-2,415 range during early US trading, showing strong resilience.
The logic behind central bank gold buying: de-dollarization and reserve diversification
The gold buying by Asian central banks is not short-term. The Monetary Authority of Singapore (MAS) clearly stated in its latest quarterly report that increasing gold holdings aims to reduce exposure to dollar assets and hedge geopolitical risks. The Governor of the Bank of Thailand noted that gold, as a zero-credit-risk asset, has outstanding long-term value preservation amid high global debt. Additionally, IMF data shows that the global share of US dollar foreign exchange reserves fell to 58.2% in Q2 2026, a 25-year low, further confirming central banks' diversification needs. The World Gold Council's chief market strategist pointed out that emerging market central banks have become the "stabilizing anchor" for the gold market, and the buying trend is expected to continue for years.
US session dynamics: resilience in gold prices behind real rates and a weaker dollar
Although the US core PCE price index for June rose 2.9% year-on-year on July 28, slightly above the expected 2.8%, gold prices did not fall sharply. Instead, as the market broadly expects the Fed to hold rates steady at its next meeting in September, and the US 10-year TIPS yield fell to -0.3% (negative territory), falling real rates directly boosted gold's appeal. Meanwhile, the dollar index faced pressure around 103.5 after US Q2 GDP growth was revised down to 1.8% (from initial 2.0%), also supporting gold prices. During the US session, COMEX gold futures volume surged to 280,000 contracts, with fierce long-short battles, but the $2,400 level remained solid support.
Silver trend: industrial demand weakness pressures prices, gold-silver ratio climbs
In sharp contrast to gold's strength, silver performed poorly during US trading on July 28. As of this writing, COMEX silver futures were at $29.8 per ounce, down 0.6% intraday, closing below $30 for three consecutive sessions. The latest data from the Silver Institute shows global industrial silver demand fell 4.5% year-on-year in H1 2026, mainly dragged by slowing growth in photovoltaic silver paste usage—China's new photovoltaic installations grew only 8% year-on-year, below the expected 15%. Additionally, extended destocking cycles in the electronics sector further dampened silver demand. Holdings of the world's largest silver ETF, iShares Silver Trust (SLV), fell by about 200 tons in July to 14,500 tons, the lowest since September 2023. The gold-silver ratio therefore rose to 80.7, close to one standard deviation above the historical average, suggesting silver is relatively undervalued.
Gold-silver divergence: institutional views and investment strategies
Regarding the current divergence, Goldman Sachs' precious metals research team believes gold, supported by central banks and ETFs (global gold ETFs have seen net inflows for nine consecutive weeks), could challenge $2,600 by end-2026, while silver needs a substantial recovery in industrial demand and may trade in a $28-32 range short term. Citigroup advises investors to arbitrage the high gold-silver ratio by pairing a long silver, short gold trade, betting on a reversion to the historical average of around 70. On the retail side, US session data shows active trading in gold call options with strike prices concentrated in the $2,450-2,500 range, while silver leans toward selling put options to collect premiums.
Risk warnings and outlook
Despite gold's solid fundamentals, investors should watch for risks such as a surprise hawkish Fed pivot or a tactical rebound in the US dollar. Key events this week include the US ISM manufacturing PMI (July 30) and nonfarm payrolls (August 4) for their impact on rate expectations. For silver, watch August data on China's photovoltaic installations and whether Indian wedding season jewelry demand recovers. Overall, the structural trend in precious metals continues, and the gold-silver divergence offers multiple trading opportunities.
