Jakarta. Indonesia’s demand for gold bars and coins surged 40% in the second quarter from a year earlier, making the country one of the world’s strongest-performing gold investment markets as a weaker rupiah and economic uncertainty drove investors toward the precious metal.

Demand for bars and coins reached 15 tons in the quarter, according to the World Gold Council’s Gold Demand Trends Q2 2026 report released Friday. The increase came even as gold prices retreated from record highs reached earlier in the year.

“Indonesia again emerged as one of the strongest-performing gold investment markets globally in the second quarter,” said Shaokai Fan, the WGC’s head of Asia-Pacific excluding China and global head of central banks. The resilience reflects a shift in investor behavior, with more Indonesians viewing gold as a long-term strategic asset amid continued rupiah weakness and uncertainty over the domestic economic outlook, he said.

Global gold demand, including over-the-counter transactions, was unchanged from a year earlier at 1,269 tons in the second quarter. That brought first-half demand to 2,522 tons, up 2% from a year earlier, with the value reaching a record $380 billion.

The gold price averaged $4,506.29 an ounce on the London Bullion Market Association benchmark in the second quarter, down 8% from the first-quarter record but still 37% above the average a year earlier.

Investment demand moderated during the quarter as prices consolidated. Gold exchange-traded funds recorded net outflows of 45 tons, although they remained in net inflow territory for the first half. Bar and coin investment was broadly stable globally at 307 tons in the second quarter, following exceptionally strong buying in the previous two quarters.

Outside formal exchanges, OTC investment — particularly from Asia — remained a key source of demand. OTC demand rose to 327 tons in the second quarter and 571 tons in the first half.

Central Banks Keep Buying
Central banks and other institutions purchased a net 289 tons of gold in the second quarter, up 62% from a year earlier. The increase followed a slowdown in purchases during the first quarter.

The WGC’s central bank gold reserves survey found that 45% of respondents plan to increase their gold holdings over the next 12 months, underscoring the metal’s continued role as a reserve asset.

“Investment is expected to remain the primary driver of demand growth through the second half, increasingly supported by OTC activity and Asian buying,” the WGC said.

Central banks are also expected to remain active buyers, although their purchases are likely to be lower than in 2025 and below the pace seen over the past four years.

Indonesia has also taken steps to strengthen its domestic gold market. The government recently launched a roadmap for developing and strengthening the bullion business and ecosystem, aimed at expanding the national bullion ecosystem and supporting downstream gold industries.

Fan said the initiative reflects growing recognition of gold’s strategic role in Indonesia’s financial system and could broaden investor participation and access to gold investment products.

High Prices Weigh on Jewelry
High gold prices continued to weigh on jewelry demand. Global jewelry consumption fell 17% from a year earlier to 278 tons in the second quarter, the lowest quarterly volume since the pandemic.

In Indonesia, jewelry demand fell 10% from a year earlier, marking a 13th consecutive quarterly decline. Consumers facing economic uncertainty are increasingly shifting toward lower-purity jewelry as they adjust to elevated gold prices, according to the WGC.

The trend is also visible across Southeast Asia, with lower-carat jewelry gaining market share as consumers seek more affordable products. Vietnam recorded the region’s steepest annual decline, at 28%, while Malaysia continued to see a structural shift toward lower-carat products.

Despite falling volumes, the value of global jewelry demand remained resilient. Spending on gold jewelry rose 14% year-on-year to $40 billion in the second quarter and reached $86 billion in the first half, up 22%.

Supply Remains Stable
Global gold supply was also unchanged from a year earlier at 1,269 tons in the second quarter. A 2% increase in mine production to 966 tons offset a 6% decline in recycled gold.

Additional mine output from Canada and Chile supported production growth, while lower gold prices from the first quarter discouraged consumers from selling old jewelry for recycling.

The WGC expects only modest growth from mine production and recycling in the second half, while high gold prices are likely to continue suppressing jewelry volumes.

“Investment is expected to remain the primary driver of demand growth through the second half, supported increasingly by OTC activity and Asian buying,” the WGC said. “Jewelry volumes will likely remain under pressure from high gold prices.”