Central banks worldwide are significantly increasing their gold holdings, with purchases in August reaching 79 tonnes, more than four times the pre-2022 average of 17 tonnes. Goldman Sachs noted that this trend reflects broader geopolitical tensions, including conflicts in Ukraine, the Middle East, and trade disputes under President Trump’s tariff agenda. China led the buying spree with 25 tonnes in August, though Goldman Sachs emphasized that other economies might be purchasing even more gold without disclosure.
The People’s Bank of China and other emerging markets are diversifying away from G7 reserve currencies, particularly the U.S. dollar. While China’s gold purchases are not alarmingly high, the bank remains underweight in gold relative to long-term allocations. Domestic central banks, which already hold substantial gold reserves, are now focusing on where to store their assets, raising concerns about reserve security and cross-country trust.
In September, the Dutch central bank relocated 86 tonnes of gold from New York and Ottawa to London, citing geopolitical unrest and the need for better crisis preparedness. The Banque de France also moved 129 tonnes of gold from New York to Europe, though it attributed the decision to purity standards rather than geopolitical factors. Goldman Sachs reported that central bank holdings at the New York Fed declined by 40 tonnes in August, while holdings at the Bank of England rose by 46 tonnes.
Central banks are increasingly diversifying their gold storage locations, with a higher percentage in 2026 declining to confirm where their gold is held. The trend toward diversified storage is expected to continue, with 18% of central banks unwilling to disclose their storage plans for the next 12 months and 9% planning further diversification.