Key Takeaways:
Central banks are buying gold at a record pace, with nearly half planning further increases in the coming year.
A record 45% of central banks intend to increase their gold reserves over the next 12 months, the World Gold Council's annual survey showed Tuesday, signaling that official-sector demand — a key pillar of bullion's rally to all-time highs — remains intact despite this year's price pullback.
"Central banks remain keen on gold, and the recent price fall has not changed their minds," said Shaokai Fan, head of the central banks sector at the WGC. The survey of 74 reserve managers was conducted between Feb. 5 and May 19, with most responses received after the start of the Middle East conflict in late February.
The proportion of central banks planning to buy rose 2 percentage points from a year ago, while 54% said holdings would remain unchanged and just 1% anticipated a decline. A record 93% of respondents already hold gold, up from 81% in the prior year. Among the drivers, 90% cited gold's performance during times of crisis — also a record — while long-term store of value and portfolio diversification ranked as top motivations. For emerging market and developing economy respondents, 85% favored gold as a geopolitical risk hedge.
The sustained buying intent provides a structural floor under gold prices even as the metal has retreated from its early-2026 record highs. The U.S. and Iran agreed over the weekend on terms to end their war and reopen the Strait of Hormuz, prompting a 3% rise in gold on Monday, according to Reuters. Consultancy Metals Focus projects central bank gold demand will slow 15% year-on-year in 2026 in tonnage terms but remain above pre-2022 levels, a consistently supportive factor for the market.
The survey also revealed a shift in storage preferences as some central banks continue relocating their gold. Nine percent of respondents said they had increased domestic storage in the past 12 months, up from 5% last year, while 10% diversified their overseas storage locations, up from 2%. Within the next 12 months, 7% plan to increase domestic storage and 9% plan to diversify overseas locations. The Bank of England remains the most popular vaulting location, followed by domestic storage and the Bank for International Settlements, the WGC said.
The buying momentum reflects a broader structural shift in reserve management that began after the freezing of Russian central bank assets in 2022. Central banks, particularly in emerging markets, have since accelerated gold purchases as a hedge against sanctions risk and dollar-denominated asset exposure. The WGC did not ask central banks to specify where their gold came from in cases of repatriation.
The latest data suggests that even a moderation in buying — as forecast by Metals Focus — would still leave official-sector demand well above historical norms. With nearly half of central banks signaling further accumulation, gold's demand floor from the official sector appears secure for the foreseeable future. The next major test for bullion will come as markets assess whether the U.S.-Iran ceasefire holds and whether lower oil prices ease inflation pressures that have driven haven demand.
This article is for informational purposes only and does not constitute investment advice.
