Why are central banks buying so much gold?

Central banks are diversifying reserves away from the US dollar, hedging against sanctions risk, protecting against inflation, and building financial resilience in an increasingly uncertain geopolitical environment.

Which central bank buys the most gold?

The People's Bank of China has been the largest reported buyer in recent years, though Turkey, India, and Poland have also made very significant purchases. Some analysts believe unreported Chinese purchases are even larger.

How much gold do central banks buy each year?

Central banks have purchased over 1,000 tonnes annually in recent years, according to the World Gold Council. This represents roughly 25 to 30 percent of annual mine production.

Does central-bank buying affect the price of gold?

Yes. Central-bank demand of over 1,000 tonnes per year is a major demand driver that tightens supply, creates a price floor on dips, and sends a strong bullish signal to other market participants.

Will central banks keep buying gold?

World Gold Council surveys indicate that the majority of central banks plan to maintain or increase their gold holdings. The structural drivers, including de-dollarization, sanctions risk, and geopolitical uncertainty, show no signs of abating.

Can individual investors benefit from central-bank buying trends?

Yes. Central-bank demand provides structural price support and reduces downside risk for individual gold holders. Aligning with the same thesis as the world's largest institutional buyers is a sound strategic approach.

Where can I track central-bank gold buying data?

The World Gold Council publishes quarterly Gold Demand Trends reports with detailed central-bank data. You can also follow gold's real-time price on MintBuilder's gold price page to see how the market responds to new data releases.

Central Bank Gold Buying: Record Demand and What It Means for Prices

Central bank gold buying has surged to historic levels, fundamentally reshaping the gold market's supply-demand dynamics. Since 2022, central banks worldwide have purchased gold at a pace not seen in decades, adding a massive new source of structural demand that supports prices independent of retail investment or jewelry consumption. In this analysis, we examine why central banks are accumulating gold, which countries are buying the most, the impact on prices, and what the World Gold Council's data tells us about the future. Monitor gold's price response in real time on MintBuilder's live gold price page.

Why Central Banks Buy Gold

Central banks hold gold for several strategic reasons that have become increasingly relevant in the current geopolitical environment:

Reserve diversification: Gold reduces a central bank's dependence on any single foreign currency, particularly the US dollar. Holding gold alongside Treasuries, euros, and yen creates a more resilient reserve portfolio.
No counterparty risk: Unlike government bonds or bank deposits, physical gold carries no credit risk. It cannot default, be frozen, or be devalued by another nation's policy decisions.
Sanctions hedging: The freezing of Russian central-bank reserves in 2022 sent a powerful signal to other nations. Gold held domestically cannot be seized or sanctioned by foreign governments, making it uniquely attractive in an era of financial weaponization.
Inflation protection: Gold maintains purchasing power over the long term, protecting a nation's reserves against currency depreciation and inflation.
Confidence and credibility: Large gold reserves signal financial strength and stability, bolstering confidence in a nation's currency and economy.

Top Buying Countries

According to World Gold Council data, the following countries have been among the most aggressive gold buyers in recent years:

China

The People's Bank of China (PBOC) has been the largest single buyer, adding hundreds of tonnes to its official reserves. China's motivations include diversifying away from US Treasuries, preparing for the internationalization of the renminbi, and building a strategic reserve that supports its growing economic power. Analysts widely believe that China's actual gold holdings are significantly higher than officially reported.

India

The Reserve Bank of India has steadily increased its gold reserves, reflecting both cultural affinity for gold and a strategic push to reduce dollar dependency. India's purchases have been consistent rather than concentrated in large bursts.

Poland

Poland's central bank, Narodowy Bank Polski, has been one of the most active European gold buyers. The country has publicly stated its intention to increase gold's share of its reserves, viewing it as a pillar of financial security in an uncertain geopolitical environment.

Turkey

The Central Bank of Turkey has been a major buyer, driven by the need to diversify reserves amid domestic currency volatility and geopolitical positioning. Turkey's gold purchases have at times been the largest of any central bank globally.

Other Notable Buyers

Singapore, the Czech Republic, Qatar, and several other nations have also added meaningfully to their gold reserves. The breadth of buying across developed and emerging markets underscores the universality of the trend.

Annual Purchase Data and Trends

The scale of central-bank gold buying in recent years is unprecedented in the modern era. Key data points from the World Gold Council include:

Central banks purchased over 1,000 tonnes of gold in both 2022 and 2023, the highest levels in decades and more than double the average of the prior decade.
Purchases remained elevated in 2024 and 2025, with quarterly demand consistently exceeding 200 tonnes.
The trend shows no signs of reversing. World Gold Council surveys indicate that central banks expect to continue adding to gold reserves in coming years.

To put these figures in context, annual gold mine production is approximately 3,500 to 3,700 tonnes. Central banks are absorbing roughly a quarter to a third of total new supply, leaving less available for investors, jewelers, and industrial users.

De-Dollarization and the Geopolitical Backdrop

Central-bank gold buying is inextricably linked to the broader de-dollarization trend. Nations are not just buying gold; they are actively reducing exposure to dollar-denominated assets, particularly US Treasury bonds.

Several factors are driving this shift:

Sanctions precedent: The freezing of Russian reserves demonstrated that dollar-denominated assets can be weaponized, prompting other nations to diversify preemptively.
Fiscal concerns: Growing US federal debt and deficit levels have raised questions about the long-term value of Treasury holdings.
Multipolar world: As economic power becomes more distributed globally, the incentive for non-Western nations to hold large dollar reserves diminishes.
BRICS expansion: The enlargement of the BRICS bloc and discussions about alternative settlement currencies have accelerated the trend.

For a comprehensive look at the dollar-gold dynamic, see our article on the US dollar and gold.

Impact on Gold Prices

The impact of central-bank buying on gold prices is substantial and multifaceted:

Direct demand effect: Over 1,000 tonnes of annual central-bank demand removes significant supply from the market, tightening the available metal for other buyers and supporting prices.
Price floor: Central banks tend to buy on dips, creating a structural price floor that limits downside. When gold pulls back, central-bank buying accelerates, cushioning declines.
Sentiment signal: When the world's most sophisticated institutional investors, sovereign nations, are buying gold aggressively, it sends a powerful signal to the market about gold's long-term value proposition.
Reduced sensitivity to rates: Historically, gold was very sensitive to US interest rates and the dollar. Central-bank demand has partially decoupled gold from these traditional headwinds, as seen in gold's resilience during the 2022-2023 rate-hike cycle.

For additional perspective on how monetary policy interacts with gold, read our guide on how Fed rates move precious metals.

World Gold Council Data and Forecasts

The World Gold Council (WGC) publishes quarterly Gold Demand Trends reports that provide the most authoritative data on central-bank activity. Key takeaways from recent reports include:

Central-bank demand has become the single largest source of gold demand growth, surpassing investment and jewelry in terms of year-over-year increase.
WGC surveys show that over 20 percent of central banks plan to increase their gold reserves in the next 12 months, with no respondents planning to reduce.
Emerging-market central banks remain the primary buyers, but developed-market banks are also maintaining or slowly growing their holdings.

The WGC's base-case projection is for central-bank gold demand to remain elevated for the foreseeable future, supported by the structural forces described above.

What This Means for Individual Investors

Central-bank buying has important implications for individual precious metals investors:

Structural support: Record central-bank demand provides a long-term floor for gold prices that did not exist a decade ago. This reduces tail risk for gold holders.
Validation of the thesis: If the world's central banks are diversifying into gold, it validates the rationale that individual investors have for holding physical metals as a hedge against currency risk and financial uncertainty.
Potential for supply squeeze: If central-bank buying continues at current rates while mine supply remains constrained, the tightening market could amplify price appreciation.
Long-term perspective: Central banks are not day traders. Their buying reflects a multi-decade strategic allocation, which aligns with the recommended time horizon for individual precious metals investors.

For a broader discussion of gold's potential price trajectory, see our analysis of gold's inflation-driven price potential and gold as an inflation hedge.

Frequently Asked Questions

Why are central banks buying so much gold?: Central banks are diversifying reserves away from the US dollar, hedging against sanctions risk, protecting against inflation, and building financial resilience in an increasingly uncertain geopolitical environment.
Which central bank buys the most gold?: The People's Bank of China has been the largest reported buyer in recent years, though Turkey, India, and Poland have also made very significant purchases. Some analysts believe unreported Chinese purchases are even larger.
How much gold do central banks buy each year?: Central banks have purchased over 1,000 tonnes annually in recent years, according to the World Gold Council. This represents roughly 25 to 30 percent of annual mine production.
Does central-bank buying affect the price of gold?: Yes. Central-bank demand of over 1,000 tonnes per year is a major demand driver that tightens supply, creates a price floor on dips, and sends a strong bullish signal to other market participants.
Will central banks keep buying gold?: World Gold Council surveys indicate that the majority of central banks plan to maintain or increase their gold holdings. The structural drivers, including de-dollarization, sanctions risk, and geopolitical uncertainty, show no signs of abating.
Can individual investors benefit from central-bank buying trends?: Yes. Central-bank demand provides structural price support and reduces downside risk for individual gold holders. Aligning with the same thesis as the world's largest institutional buyers is a sound strategic approach.
Where can I track central-bank gold buying data?: The World Gold Council publishes quarterly Gold Demand Trends reports with detailed central-bank data. You can also follow gold's real-time price on MintBuilder's gold price page to see how the market responds to new data releases.

Join the world's central banks and secure your gold position today. Browse MintBuilder's gold coins and bars and track prices on our live spot-price dashboard. Build wealth the way nations do, with physical gold.