Central Banks May Have Room for Further Gold Purchases

Central banks have been buying gold at an unprecedented rate since Russia's invasion of Ukraine in February 2022, and analysts believe this trend is likely to continue. According to Bank of America (BofA), central banks may have substantial room for further purchases as under-allocated institutions aim to reach a more efficient reserve allocation.

BofA estimates that the remaining institutions would need to acquire around 20,333 tonnes of gold to reach the target threshold of 30% of total reserve assets. This is equivalent to over two decades of purchases at recent rates. China has the largest potential shortfall among individual central banks below the threshold, with an estimated 5,628 tonnes still needed.

The World Gold Council's data shows official global gold holdings totaling around 36,705 tonnes. Central-bank net purchases reached a record 1,092 tonnes in 2024, led by Türkiye and Poland as major buyers.

BofA believes the gap between current and potential allocations is supportive of gold prices, particularly if reserve diversification continues and under-allocated central banks gradually increase their exposure to the precious metal.