Central Banks' Gold-Buying Spree Surges to 650 Tonnes Annually
Central banks worldwide have been on a gold-buying spree, with annual purchases averaging 650 tonnes over the past five years. This surge, unlike the previous decade when many central banks were net sellers, shows no signs of slowing down through 2025 and beyond.
The global gold rush is driven by various factors. Some central banks are diversifying their reserves, reducing their dependence on the US bank, which now accounts for 58.9% of global foreign exchange reserves, down from 62.6% in 2019. Additionally, gold's safe-haven status is attracting investors during periods of systemic stress. Central banks purchased 694 tonnes in the first three quarters of 2024 alone, further boosting global official gold reserves to approximately 36,699 tonnes.
Notably, some nations are acquiring gold discreetly for strategic or geopolitical reasons, adding to the 'unreported' demand. The weaponization of international financial systems is also a compelling motivation, as gold offers financial sovereignty during geopolitical conflicts.
Led by countries like Turkey, China, Poland, India, and Russia, central banks' sustained demand is a major driver of gold prices, creating a price floor and contributing to gold's resilience during market volatility. With the largest reserves, the United States holds approximately 8,133 tonnes, followed by Germany with about 3,395 tonnes, and the IMF with roughly 2,814 tonnes. As central banks continue to accumulate gold, the global gold market remains robust and dynamic.
