- Growing central bank demand is fueling high gold prices.
- Central banks are buying gold to guard against inflation, global conflict, and dollar risks.
- Individuals can also protect their wealth with physical gold held in a Gold IRA.
Central Banks & Gold
Soaring gold prices have been getting a lot of attention lately, from institutional buyers to individual investors looking to protect their wealth. This amazing surge can be tied directly to central banks. And it’s showing no signs of stopping.
Around the world, central banks increased their gold holdings to nearly 20 percent of official reserves last year. They are expected to buy another 1,000 tons this year. Their relentless gold buying is sending a powerful signal to individuals looking for a safe, time-tested way to safeguard their retirement savings.
Central Banks Keep Adding to Reserves
Led by Kazakhstan, Turkey, and Poland, central banks added to their gold reserves in May and June. Meanwhile, China’s gold buying spree continues unabated. In June, China marked its eighth consecutive month of purchases. Even though their pace has eased slightly, analysts do not expect the trend to stop anytime soon.
To put it in perspective, central banks have added over 1,000 tons of gold annually for three years in a row. That’s far above the long-term average. According to analysts at Heraeus, these purchases have helped gold consolidate near $3,300 an ounce.1
The World Gold Council’s Central Bank Gold Reserves Survey 2025 provides an overall picture. It found that:
• 43% of central bankers expect their own banks to increase gold reserves (up from 29% in 2024)
• 95% believe official global gold reserves will continue to grow in the next 12 months
• 76% project gold will make up a larger share of reserves over the next five years
• 73% expect to reduce their U.S. dollar reserves over the same period
• 44% now actively manage gold separately (up from 37% in 2024)2
Meanwhile, the Gold Focus Report projects central banks will buy 1,000 tons again this year. Which would mark the fourth straight year at that level. Fifteen years ago, central bank demand was just about 10 percent of the gold market. Today it is around 21 percent.3
Reasons Banks Buy Gold
The reasons are clear. Gold is valued as a hedge against inflation and as a safe haven during crises. Unlike paper currencies, gold tends to hold or even increase its value over time, protecting a nation’s wealth.
Eugenia Mykuliak is Founder and Executive Director of B2PRIME Group. She summed it up like this: “Central banks aren’t buying in anticipation of the next crisis; rather, they are diversifying in response to the current reality. And that reality is defined by policy uncertainty, weak global coordination, and long-term inflation drift. Gold is regaining its role as a quiet form of protection.”4
Geopolitical tensions are another key factor. Countries want to diversify away from the U.S. dollar, which has been volatile due to trade wars, sanctions, and conflicts in regions like the Middle East. Gold is not tied to any single government or economy, making it an appealing alternative.
Loss of Confidence in the U.S. Dollar
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According to the IMF, central banks are diversifying away from the U.S. dollar at an accelerating pace. Yardeni Research noted that “what’s driving the gold rush is central banks’ waning confidence in the U.S. dollar as a reserve currency.”6
Joy Yang of MarketVector Indexes noted that trade wars and U.S. policy shifts are pushing nations to reduce their exposure to the dollar. “There are no alternatives to the U.S. dollar, but that does not mean nations will not continue to reduce their exposure to it. The only other option out there is gold,” she said.7
The BRICS nations have been major buyers of gold as they look for a dollar alternative. China in particular has reduced its holdings of U.S. Treasuries from $784 billion in February to $757 billion by the end of April.8
What About the U.S. Federal Reserve?
Unlike other central banks, the Federal Reserve does not buy gold. It acts only as a custodian, storing gold for the Treasury, foreign governments, and other central banks. The gold it holds belongs to the U.S. Treasury or foreign entities. The U.S. Treasury does not regularly buy gold on the open market. The book value of U.S. gold is still set by law at just over $42 per ounce, far below current market prices. There has been talk about revaluing gold, but no policy changes have been made.
Gold Price Predictions
It took nearly two years for gold to climb from $2,000 to $3,000 an ounce. Some analysts believe the move from $3,000 to $4,000 could take just half as long. Goldman Sachs, JPMorgan and other Wall Street analysts are forecasting gold prices will reach the $4,000 milestone by the middle of 2026.9
Conclusion
Central banks around the world are buying gold to protect against inflation, trade wars, and global conflicts. Their purchases are supporting gold prices now, into 2026, and beyond. You can take the same protective step for your personal finances. Make the global trend personal by opening a Gold IRA with precious metals from American Hartford Gold. Call us today at 800-462-0071 to learn how you can safeguard your wealth with physical gold.
