August 18, 2026
Having examined, in the second part of this series, the background to the sharp rise in the price of gold in early August – which came as a surprise to many investors – and focusing on the fundamental drivers behind central banks’ demand for gold, today, in Part 3, we take a closer look at the latest figures: Who is buying
A significant increase in the second quarter
Following a rather subdued start to the year, central banks significantly stepped up their gold purchases in the second quarter of 2026. According to data from the precious metals dealer Ophirum, central banks increased their reserves by a total of around 289 tonnes of gold between April and the end of June.
Compared with the mere 57 tonnes of gold purchased by central banks in the first quarter of 2026, this was not only an extremely sharp rise, but also, as it were, a return to the ‘old’ normality that had prevailed since 2022. According to the latest calculations by the World Gold Council, the total official gold reserves of all central banks worldwide stand at around 36,600 tonnes, reaching an all-time high.
At the top of the list of buyers in 2026 are, above all, Poland and China. Poland has steadily increased its holdings as part of a stated strategy to raise the proportion of gold in its own currency reserves to around 20 per cent. China, for its part, reported its twentieth consecutive month of rising gold reserves in May. China’s official gold reserves stood at around 2,331 tonnes at that time.
However, it is not just the ‘usual suspects’ who are currently flocking to gold. New groups of buyers are also emerging: according to the World Gold Council, countries such as Indonesia and Malaysia have recently begun to replenish their gold reserves again after a prolonged period of restraint.
Not all central banks are buying – an important distinction
However, the picture of central banks making massive purchases is not uniform. Turkey, for example, which was still among the largest gold buyers in 2025, has reduced its holdings in the first few months of this year. In January and February 2026 alone, the Turkish central bank reduced its gold holdings by around 8.1 tonnes.
Domestic political factors, in particular the use of gold reserves to prop up the country’s own currency, play a role here. The case of Turkey illustrates very well that the purchasing decisions of individual central banks can certainly be driven by short-term and highly country-specific motives. Investors should therefore not simply and indiscriminately assume that every central bank is following the global trend to the same extent.
Why these purchases have a structural impact
However, what is decisive for the price of gold is not so much individual reports of central bank purchases or sales as the fundamental orientation of their global reserve policy. One aspect deserves particular attention in this regard. It fundamentally distinguishes central banks’ gold purchases from those of institutional and private investors: central banks act as buyers with a particularly long-term orientation who are not very price-sensitive.
This means that gold is generally not held for a few weeks or months, but over years or decades. As a result, this demand continuously withdraws supply from the market, regardless of short-term price fluctuations. The World Gold Council’s Central Bank Gold Reserves Survey 2026, mentioned earlier, underscores this trend: 89 per cent of the reserve managers surveyed expect global central bank gold reserves to continue rising, whilst 45 per cent even anticipate an increase within their own institution.
Long-term security counts for more than short-term returns
The reasons for purchasing are also interesting. The central bankers surveyed cite gold’s proven track record in times of crisis, its long-term preservation of value and the diversification of reserve portfolios away from an excessive concentration on a single currency as the most common motives.
This structural, multi-year demand forms an important foundation for the current gold price rally. Whilst it does not explain the short-term price surge in a single trading week, it does explain why many market observers are optimistic about the longer-term trend.
Unlike many private investors, who often act pro-cyclically and take profits when prices surge, central banks usually stick to their strategic approach even when the price fluctuates sharply in the short term. For them, the long-term security of gold – proven over centuries – carries far greater weight than any short-term profit, however attractive it may be.
In the next part of this series, we turn our attention to the US Federal Reserve itself: why is the Federal Reserve currently facing a monetary policy dilemma between combating inflation and economic weakness, and what does this dilemma mean for gold?
