The price of gold has dropped 25% since reaching its peak of US$5,417 on January 28, 2026. Despite this decline, central banks, institutions, and retail investors have been actively buying gold, suggesting a potential rebound in the near future.
Central banks have been net buyers of gold since 2010, with purchases exceeding 800 tonnes annually since 2022. In 2026, year-to-date purchases through the third quarter have already surpassed 600 tonnes. Notably, the People’s Bank of China (PBoC) has been a significant buyer, increasing its official purchases as gold prices fell.
Retail and institutional investors have also shown renewed interest in gold. While gold ETF holdings declined from 2020 to mid-2024 due to investor disinterest, buying surged from mid-2023 to early 2026 as gold prices rose. Interestingly, investors have continued to buy gold ETFs even as prices declined from early 2026 to mid-2026, a behavior that deviates from typical market trends.
The sustained buying from central banks and investors is laying the groundwork for gold to move higher. However, other favorable conditions, such as a decline in the U.S. dollar or interest rates, may be needed to trigger further price increases.