October 7, 2026
The World Gold Council (WGC) reported net central bank purchases of 39 metric tons of gold in August, led by China with 20 metric tons, followed by Uzbekistan and Poland with 8 metric tons each. This brings official purchases for the year through the end of August to 170 metric tons. For investors, the data is more than a footnote: It helps explain why the gold price remains relatively stable despite a strong dollar and high US yields.
Who bought in August - and how much
The WGC's monthly statistics show a familiar pattern: China once again tops the list of buyers, followed by two central banks from Central and Eastern Europe and Central Asia, respectively, which have ranked among the most active participants in the official sector for years. With 39 tonnes of gold in August and 170 tonnes since the beginning of the year, demand is at a level that has long become a key factor in market calculations.
What matters here is not so much any single month, but consistency. Central banks do not buy countercyclically in the traditional sense; instead, they follow multi-year reserve plans. For this group of buyers, price declines therefore do not automatically lead to restraint, nor do price increases prompt profit-taking. It is precisely this price insensitivity that distinguishes the official sector from ETF investors or futures market speculators.
Why gold’s lack of counterparty risk appeals to central banks
Bundesbank President Joachim Nagel stated the rationale openly at the LBMA Global Precious Metals Conference in Sorrento on Monday: A fragmented, less predictable world raises fundamental questions about diversification and the role of gold in foreign exchange reserves. Unlike foreign securities or deposits, physical gold held domestically carries no counterparty risk and cannot be frozen.
This argument has gained weight as sanctions risks have moved higher on reserve managers’ agendas. According to Nagel, the Bundesbank itself holds more than 3,500 metric tons, making it the world’s second-largest official holder. Gold’s share of global central bank reserves has risen from around 14 percent in 2023 to nearly 25 percent—although Nagel explicitly noted that a significant portion of this increase reflects the rise in the metal’s price itself, rather than new purchases alone.
The latest WGC survey supports this view: 45 percent of the monetary authorities surveyed plan to increase their holdings over the next twelve months—the highest level since the survey began. 89 percent expect global reserves to rise overall. In addition to hedging geopolitical risks, respondents cited long-term store-of-value characteristics as a key motivation.
High yields are a drag—but less so than the textbooks suggest
The interest rate environment remains the main headwind. Because gold generates no ongoing income, non-interest-bearing assets become relatively less attractive when government bonds offer high yields. About one month after the US Federal Reserve’s latest rate hike, the metal has lost 6.7 percent, while yields on long-term US Treasuries remain near multi-year highs.
What is notable, however, is how resiliently gold has responded to this textbook pattern. Sergio Nicoletti Altimari, Deputy Governor of the Banca d'Italia, said in Sorrento that the traditionally inverse relationship between gold and real yields has weakened since 2022. Structural shifts driven by sovereign reserve buyers are therefore cushioning at least some of the pressure from interest rates.
UBS analyst Giovanni Staunovo views central bank demand as a persistent structural tailwind, even though a strong dollar and high yields are limiting near-term recoveries. For investors, this means that interest rates and the dollar continue to explain short-term swings, while the official sector accounts for the notable price floor.
Key dates shaping the coming trading days
Attention is now turning to Washington. On Wednesday, the Fed will release the minutes of its mid-September meeting, which are expected to provide clues about the future path of interest rates. US consumer price data for September will follow on October 14. An inflation surprise would shift interest rate expectations and have an immediate impact on the gold price through the dollar and bond yields. The latest US labor market report was weaker than expected, dampening expectations of further tightening in October.
The geopolitical situation is another factor. Many analysts view tensions in the Middle East as a key driver for the coming sessions—if the situation escalates, demand for safe-haven assets is likely to quickly return to the forefront. Meanwhile, central bank purchases provide the slower but more consistent component of demand.
Source：https://goldinvest.de/en/central-bank-gold-rush-39-tonnes-in-august-china-leads-buying-wave
