Central Banks Boost Gold Buying Amid Price Decline
Despite a decline in gold prices to $4,506 an ounce in Q2 2026, central banks increased their purchases by 62% in the same quarter, buying 289 tonnes. This represents a significant shift in market dynamics, as central banks are now major price-insensitive buyers motivated by reserve diversification and geopolitical risks.
Gold prices averaged $4,506 an ounce in Q2 2026, down 8% from Q1 but up 37% year-over-year. Central banks' increased gold buying has led to a unique market structure favoring holders, requiring patience and disciplined investing for investors.
The trend of central bank buying is expected to continue over decades, suggesting that gold serves as a hedge against monetary and geopolitical instability rather than a traditional inflation or recession hedge. For investors, a modest allocation of 5-10% in portfolios is recommended.