Gold Surges on Central Bank Buying and US Debt Concerns

The gold market is experiencing a surge in momentum, driven by two distinct forces. On one hand, central banks are resuming their aggressive accumulation of gold, with official sector purchases reaching 288.9 tonnes in the second quarter of 2026, according to the World Gold Council.

Poland led the charge with 51 tonnes, followed by China at 33 tonnes. This rebound stands in stark contrast to the opening months of the year, when central banks showed a surprisingly weak start to their buying.

In addition to official sector purchases, global gold ETFs have also seen a significant increase in inflows, absorbing more than 46 tonnes of net inflows in the first half of August. This acceleration marks a recovery in investor sentiment following the sell-off triggered by the Iran conflict in June.

The US Treasury's decision to double its buybacks of longer-dated government bonds has added another layer of support to gold prices. The program, which will see the Treasury purchase at least $4 billion per operation starting September 9 and running through November 4, is being interpreted as a signal that Washington is growing concerned about its own debt trajectory.