Central Banks Rush to Buy Gold Amid Geopolitical Uncertainty

Central banks around the world purchased a record 289 tonnes of gold in the second quarter, marking a 74 percent annual increase from the same period last year. This significant surge in buying is largely attributed to ongoing geopolitical uncertainty and its impact on global markets.

The World Gold Council noted that this was also a more than five-fold increase from the first quarter's revised total of 57 tonnes. The National Bank of Poland emerged as the largest buyer, adding 51 tonnes to bring its gold reserves to 632 tonnes at the end of June. The People's Bank of China followed closely behind with 33 tonnes, marking its biggest quarterly addition since the fourth quarter of 2023.

Regulators remain confident in gold's ability to diversify their reserves and provide a hedge against uncertainties in geopolitics and financial markets. Analysts at the WGC stated that gold's role as a long-term store of value continues to feature prominently in central bank thinking, with ongoing heightened uncertainty likely sustaining central bank appetite.

While net purchases for the first half of the year were down to 345 tonnes, the lowest in four years, the WGC stressed that central bank sentiment towards gold remains notably strong. The council attributed this to a long-standing desire for reserve diversification and the appeal of gold as a safe-haven asset.