Gold-Producing Nations Hoard Supply as Dollar Trust Ebbs

For decades, gold from emerging-market mines flowed to Western hubs like London and New York for refining and trade. But now, gold-producing countries are shifting gears, prioritizing domestic refining, taxing exports, and stockpiling gold for their central banks. This trend, described as a 'new form of resource nationalism,' could push gold prices higher in the long run. The drivers? Declining trust in the U.S. dollar and the risk of assets being frozen under sanctions.

Laos, for example, produced about 12 tons of gold in 2025 and has set up the Lao Bullion Bank to refine its gold locally and boost the metal's role in its foreign exchange reserves. Indonesia, the world's 10th-largest gold producer, plans a 15% export tax starting in 2026 to curb shipments. Meanwhile, China, the top producer, restricts gold exports, while its central bank has been steadily increasing reserves.

The trend extends beyond Asia. Madagascar's central bank has been buying domestic gold since the early 2020s, and Ghana aims to ensure its gold benefits local communities. Analysts note this shift could squeeze Western refiners' access to gold supplies. As Jeff Toshima told Nikkei, 'Gold from the colonies flowed into London and helped underpin the British Empire's gold standard. The colonies, it seems, would now like to keep the gold.'

The sanctions imposed on Russia after its 2022 invasion of Ukraine accelerated this shift. Countries now see gold as a safer reserve asset, insulated from political risks. Central banks are buying gold at record rates, Goldman Sachs estimates they purchased 91 tons per month in mid-2026, up from 17 tons pre-2022. China's central bank has boosted its gold reserves by 20% since 2022, while cutting U.S. Treasury holdings by 41% since 2020.

Despite this demand, gold prices haven't surged due to the Federal Reserve's rate hikes. Goldman Sachs still predicts gold will reach $5,400 per ounce by late 2027, with central bank buying doing 'nearly all' the heavy lifting.