Gold Prices Soar on Central Bank Buying and Dollar Weakness

Gold prices have been rising steadily since the start of August, up 8% in just over a month. This comes after a brutal 30% decline at the beginning of the year.

The silver price has also seen a significant increase, with a 16% rise since mid-July. One contributing factor to this strength is the recent weakness in the US dollar against a basket of major currencies.

A weaker dollar makes precious metals cheaper for non-dollar buyers, which can be attributed to the mirror image of the dollar strength that contributed to gold's decline in early 2026.

Central banks and sovereign wealth funds purchased 289 tonnes of gold in the second quarter of 2026, a 62% year-over-year increase. Poland was the largest buyer, followed by China, which bought its largest quarterly addition since 2023.

The World Gold Council's annual survey found that 89% of central bank reserve managers expect central bank holdings to keep rising over the next 12 months.