July 8, 2026
Counter-cyclical buying is helping to stabilise prices
The recent price dip in the gold market has triggered targeted purchases by central banks. During a period of technical weakness, in which the gold price fell below its 200-day moving average of US$4,500 per ounce and temporarily dipped below the US$4,000 mark, analysts are increasingly seeing signs of a sustainable bottom forming. This is being significantly supported by counter-cyclical demand from the official sector. The People’s Bank of China, in particular, seized the opportunity and purchased 15 tonnes last month. This marks the largest monthly purchase this year and the 20th consecutive month of rising reserves. According to the World Gold Council, China’s official holdings now total 2,346 tonnes, representing an increase of just over 40 tonnes since the start of the year.
International diversification beyond China
Alongside China, other nations are also emerging as major buyers on the gold market. Uzbekistan increased its reserves by a further 9 tonnes in June and, with 41 tonnes since the start of the year, is currently the second-largest buyer. However, based on data up to May, the National Bank of Poland remains the frontrunner with net purchases of a remarkable 64 tonnes. This underlines that institutional interest is geographically widespread and that global price dips are being used to strategically build up reserves.
De-dollarisation as a long-term catalyst
Although some countries have recently had to liquidate their gold reserves to prop up their currencies in the wake of the global energy crisis triggered by the Iran conflict, institutional demand is likely to pick up again in the second half of the year. Experts point to the undisputed trend towards de-dollarisation. As soon as oil-producing countries start recording higher revenues again, it is expected that this capital will flow less into US government bonds and instead increasingly into the gold market. For central banks worldwide, the precious metal thus remains an essential strategic component of their reserves, the long-term accumulation of which is consistently pursued during price declines.
Source：https://goldinvest.de/en/gold-price-slump-why-central-banks-are-now-buying-gold-on-a-massive-scale
