Gold Defies Irrelevance Again as Central Banks Keep Buying

Gold has defied predictions of its irrelevance, surviving as a significant store of value despite periods of stagnant prices. In January 2026, the London Bullion Market Association (LBMA) gold benchmark hit a record $5,501.70 an ounce before retreating sharply.

The metal's enduring popularity can be attributed to its unique characteristics and ability to serve as a hedge against inflation and currency fluctuations. Central banks have continued to purchase large quantities of gold, with estimated 863 tonnes acquired in 2025 alone.

However, not all experts agree on the merits of gold as an investment. Some argue that it produces no contractual income and has underperformed productive assets over long periods. Nevertheless, its price can respond differently from equities and bonds during times of financial stress or geopolitical uncertainty.