Gold Price Struggles Above $4,000 Amid Central Bank Buying Spree

The gold market is facing a peculiar disconnect between its price and central bank buying activity. Despite a record 36,664.5 tonnes of gold held by central banks, representing 16.7% of all the metal ever mined, the spot price has struggled to hold above $4,000 an ounce.

At Friday's close, gold settled at $4,055.70, eking out a modest 0.86% weekly gain that masked five days of violent intraday swings. The proximate cause of the volatility was a sudden shift in the geopolitical landscape following nearly two weeks of strikes by US Central Command against Iran.

Central banks continue to amass gold at an unprecedented pace, with official sector holdings crossing the 36,600-tonne threshold for the first time in July. This buying spree has been ongoing for years, with the market value of those reserves now standing at roughly $4.78 trillion based on the July 21 LBMA fix.

The United States remains the dominant holder with 8,133 tonnes, representing 22.2% of all central bank reserves and a market value of roughly $1.06 trillion. However, Poland has emerged as one of the most aggressive buyers in recent years, adding 165.6 tonnes in 2025 and another 63.6 tonnes in the first months of 2026, a cumulative outlay of roughly $21.6 billion at current prices.

The buying is not universal, with Turkey partially liquidating reserves to support its currency and Russia trimming its position due to fiscal pressures. However, for now, the aggregate trend remains supportive, providing a structural floor beneath a market that is otherwise searching for direction.