June 30, 2026
Commentary
The Ninepoint Gold Bullion Fund returned -12.46% (Series F CAD) in Q2 2026, bringing YTD performance to -4.20%.
NINEPOINT GOLD BULLION FUND - COMPOUNDED RETURNS¹ (%) AS OF JUNE 30, 2026 (SERIES F NPP226) | INCEPTION DATE: MARCH 18, 2009
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
15YR |
INCEPTION |
|
FUND |
-9.11% |
-4.20% |
-12.46% |
-4.20% |
25.65% |
29.77% |
19.98% |
11.80% |
8.60% |
8.78% |
GOLD SPOT (CAD) |
-9.19% |
-4.12% |
-12.46% |
-4.12% |
26.37% |
30.75% |
20.97% |
12.77% |
9.54% |
9.60% |
The second quarter of 2026 was a period of digestion for gold following an extraordinary start to the year. After surging to an all-time high in January, the metal spent Q2 working off speculative excess and resetting to a valuation more consistent with the current rate environment. While the price action was volatile, the underlying demand picture — particularly from central banks and Asian investors — remained constructive.
Price Performance: A Necessary Reset
Gold fell 14.1% in Q2, retracing its Q1 gains and pulling back over $1,500/oz from the all-time intraday high set in late January. Volatility picked up in April, with most of the move unfolding over the following two months. On June 24, gold briefly dipped below $4,000/oz for the first time since November 2025, before stabilizing around that level and closing the quarter at $4,008. While this represented gold's largest quarterly retracement since Q2 2013, corrections of this size are a normal feature of markets that have risen as far and as fast as gold did over the prior year, and the metal still finished the quarter up 21.3% on a trailing 12-month basis. The pullback can reasonably be read as consolidation after a historic advance rather than a change in trend.
Key Market Drivers
1. A More Hawkish Fed
New Fed Chair Kevin Warsh signaled after the April FOMC meeting that the committee would prioritize "price stability" following five consecutive years of above-target inflation. Real rates rose from 2.00% in early April to 2.28% by late June, which tracked closely with gold's move down from roughly $4,650 toward $4,000. Markets adjusted their expectations accordingly, moving from pricing cuts to weighing the odds of a hike later in the year. Viewed against the metal's run over the past two to three years — from roughly $2,000/oz in mid-2023 to a January 2026 peak near $4,650, more than a doubling in under three years — a retracement of this magnitude looks like a healthy, arguably overdue correction within a longer structural uptrend rather than an indication that the trend itself has turned.
2. Dollar Strength
The dollar firmed against most major trading partners for much of the quarter after easing briefly in April, which raised the effective cost of gold for international buyers — a normal headwind during periods of policy repricing rather than a sign of weakening structural demand.
3. Physical and Emerging-Market Demand Stayed Firm
The most encouraging signal of the quarter came from physical markets. Global bar and coin demand rose 42% year-over-year to 474 tonnes in Q1, with China up 67% to a record 207 tonnes and India posting its strongest first quarter since 2013. This divergence between physical accumulation and paper-market selling suggests the correction was concentrated in leveraged and short-term positioning rather than in the buyer base that has underpinned gold's multi-year re-rating.
4. ETF Flows Moderated but Didn't Collapse
April saw net inflows of 32.91 tonnes before May turned modestly negative, with net outflows of 7.31 tonnes concentrated in North America. Global holdings eased just 0.4% in May to 4,121 tonnes — still close to February's record of 4,176 tonnes — with Europe continuing to add positions even as North America pulled back. Importantly, a $1.1 billion weekly inflow in late June broke a four-week streak of redemptions, a sign that dip-buying resumed as prices approached the psychologically important $4,000 level
5. Central Banks Remained the Structural Backstop
Central banks bought a net 244 tonnes of gold in Q1 2026, according to the World Gold Council's Gold Demand Trends report. Looking ahead, the WGC's 2026 Central Bank Gold Reserves survey found 89% of reserve managers expect global gold holdings to increase over the next 12 months, with a record 45% of the 76 banks surveyed planning to add to their own reserves — the broadest participation in the survey's nine-year history. The ECB's June report showed gold reaching 27% of total official reserves at the end of 2025, overtaking US Treasuries at 22% for the first time, underscoring how entrenched gold has become in official reserve strategy.
Outlook
The Q2 correction resets the technical and psychological backdrop for gold heading into the back half of 2026, and the case for a continued allocation to the metal remains well-supported by several durable pillars.
Central bank buying looks structural, not cyclical. With a record share of reserve managers planning to add to holdings over the next year, and gold now rivaling Treasuries as a share of official reserves, the official sector appears committed to accumulating gold as part of a multi-year reserve diversification strategy rather than opportunistic buying tied to any single price level. This kind of demand tends to be far less sensitive to short-term rate moves than ETF or futures positioning, and it has provided a durable floor through past corrections.
Physical demand in Asia continues to broaden the buyer base. Record bar and coin purchases in China and India, alongside steady central bank accumulation across emerging markets, point to a structural shift in who owns gold and why. This diversification of the buyer base — away from being purely a Western, rate-sensitive trade — is one of the more important developments of the past year and should help dampen volatility over time even if it doesn't eliminate it.
The macro backdrop still has multiple paths that favour gold. Persistent fiscal deficits, elevated government debt levels, and ongoing de-dollarization efforts by reserve managers all remain intact regardless of the near-term rate path. Should inflation prove stickier than the Fed currently expects, or should growth concerns re-emerge, gold's traditional role as a hedge against both scenarios would likely reassert itself. Even in a higher-for-longer rate environment, the reserve-diversification and de-dollarization themes provide an independent source of demand that doesn't depend on rate cuts to sustain itself.
Near-term price action will likely stay sensitive to the Fed. The path of least resistance in Q3 probably depends on whether incoming inflation data allows the Fed to step back from hawkish rhetoric, and on how the dollar behaves in response. Continued strength in both could keep gold rangebound or under modest pressure a while longer. But the underlying demand architecture built over the past two years — central banks, Asian retail buyers, and a structurally more diversified reserve system — gives us confidence that pullbacks like Q2's represent buying opportunities within a longer-term uptrend rather than the start of a reversal.
For investors with a multi-year horizon, we continue to view gold as a core strategic holding: a resilient hedge against fiscal and currency risk that has now demonstrated its ability to absorb a significant repricing shock without breaking its longer-term structural demand story.
Sincerely,
Ninepoint Partners
Sources: World Gold Council, KITCO, Bloomberg, UBS Research
All figures in USD unless stated otherwise.