Central Banks' Gold Buying Spree Driven by Geopolitical Tensions

Central banks' gold buying spree has been driven by three key factors that have largely gone under the radar. The first factor is their consistent purchasing of gold, which has seen them accumulate a record amount in recent years.

The second factor is that many nations are repatriating their gold reserves back home from vaults abroad, or at least away from the US. This trend was highlighted by De Nederlandsche Bank's (DNB) decision to bring back approximately 86 tonnes of its gold reserves from the US and Canada to London in March-August 2026.

The third factor is that gold reserves are now growing faster than holdings of government securities. According to the IMF, gold's share of total official foreign exchange reserves reached 27% at the end of 2025, overtaking both the euro and US Treasuries. However, this does not necessarily signal de-dollarisation.

Central banks have been buying gold at an average rate of 500 tonnes a year in recent times, but this pace picked up sharply from 2022 onward. After buying 1,082 tonnes in 2022 and 1,037 tonnes in 2023, central banks purchased a record 1,092 tonnes of gold in 2024.

Even though the pace slowed in 2025 and H1 2026, central banks continue to hold favorable expectations on gold. According to the World Gold Council's (WGC) 2026 survey, 89% of bankers expect an increase in global central bank gold reserves over the next year.