Agio Gold Sector Fund Ltd. Fact Sheet - July 2026

Demand Holds Firm as the Price Cools

The second quarter told a quietly reassuring story. Even as the gold price softened, the world bought just as much gold as a year ago: total demand, including over-the-counter buying, was unchanged at 1,269 tonnes. That took first-half demand to 2,522 tonnes, up 2% on last year, and in dollar terms the first half set an all-time record of US$380 billion. Lower prices did not scare buyers away. They kept buying, and they spent more than ever.

The Big Picture

Beneath the headline, the mix of buyers shifted in a healthy way. The most price-sensitive money, gold ETFs, stepped back modestly as North American investors adjusted to higher interest rate expectations and a stronger dollar. But the patient, strategic buyers stepped forward: central banks made significant purchases and everyday savers kept buying bars and coins at normal levels. When short-term money rotates out and long-term money keeps accumulating, that is typically a foundation, not a warning.

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Key Market Drivers

Central Banks Came Back in Force: After a slow first quarter, central banks bought 289 tonnes of gold in Q2, a sharp recovery to the elevated pace that has been typical over the last four years. Central banks buy gold as a long-term safety reserve, and their steady, price-insensitive demand puts a durable floor under the market.

Everyday Investors Stayed the Course: Bar and coin buying held steady at 307 tonnes, a return to normal levels after two extraordinarily strong quarters. Gold ETFs saw moderate outflows of 45 tonnes as some investors reacted to rising rate expectations and a firmer dollar. The rate-sensitive money paused; the steady savers did not.

Jewellery Buyers Are Paying More for Less: Jewellery volumes fell to 278 tonnes, the lowest quarterly level since the pandemic, as high prices squeezed affordability. Yet spending on gold jewellery rose 14% to US$40 billion. People are buying fewer grams but committing more money, confirming gold's enduring place in household wealth. Technology demand also formed slightly to 80 tonnes as AI-related usage offset weaker consumer electronics.

The Miners' Margin Check: Gold's Real Price

Our model tracks gold's real price: the gold price measured against broad commodity costs, which tells us whether miners are actually making money. That ratio surged to 175 in February and has since fallen to 102, a level our technical work reads as oversold. Historically, readings like this have formed the base for extended rallies. A recovery would lift profits for the large producers first and improve the climate for smaller exploration companies, which offer greater upside potential but carry higher risk.

Looking Ahead

Three things matter from here: whether central banks sustain their renewed buying, whether ETF money returns as rate expectations shift, and the seasonally stronger demand the second half typically brings. For the fund, the picture is constructive. Demand is holding at record value, strategic buyers are accumulating, and our real-price measure sits at oversold levels from which recoveries have historically formed. We are positioned for that recovery, mindful that timing is never guaranteed.