Why Are Central Banks Buying Record Amounts of Gold Again?

Oil is up. The dollar is near its strongest level of the year. Interest rates are under pressure to rise, not fall. And gold is down roughly 30% from its January peak. By almost every normal rule of thumb, that's a lineup of reasons to sell gold, not buy it. Central banks reportedly did the opposite — and bought the most of it in a single quarter since late 2024.

A sourcing note before the numbers: the reserve figures in this guide are reported by the World Gold Council and cited here as such — they haven't been independently re-pulled from the WGC's own quarterly reports by OmniFin Portal. Verify current figures at gold.org before relying on any specific number below, since this data updates every quarter and can move markets when it does.

The data: a sharp reversal within one year

Central banks — the institutions that manage each country's currency reserves — have spent the last two decades steadily shifting part of those reserves out of U.S. dollars and into gold. The World Gold Council tracks this every quarter, and the swing within 2026 alone was stark: roughly 60 tonnes bought in Q1 (the weakest start to a year in more than 15 years, right as gold hit its record high near $5,600), followed by about 290 tonnes in Q2, and then 321 tonnes in Q3 — reportedly 42% more than the same quarter the year before.

The pattern across the year reads as deliberate, not reactive: central banks reportedly slowed sharply when gold was at its most expensive in January, then built buying back up in steady size as the price fell through the year — rather than chasing the price higher.

Who was buying — and who was selling

China was reportedly the largest disclosed buyer in the quarter at 63 tonnes, with Poland next at 40 tonnes. On the other side, Russia was reportedly the one major net seller, at around 19 tonnes — commonly attributed to financing its ongoing war — while Kazakhstan, a country that drew attention for selling gold in an earlier quarter, reportedly returned to being a net buyer over the period. These are the kind of country-level swings that can reverse from one quarterly report to the next, which is exactly why this data is worth checking directly rather than relying on any single snapshot, including this one.

Why buy something that's falling in price?

Two reasons are commonly cited for this kind of contrarian buying. The first is the obvious one: after a 30% drawdown, gold is simply cheaper than it was in January, and a disciplined long-term buyer treats that as a discount rather than a reason to avoid it.

The second is less obvious: a large share of central bank reserves are held in U.S. government bonds, which get repaid in dollars when they mature. When the dollar is near its strongest level of the year — as it reportedly was during this buying — each dollar of maturing reserves converts into more gold than it would when the dollar is weaker. It's the same logic as exchanging currency for a trip at a favorable exchange rate rather than an unfavorable one: the amount you're converting doesn't change, but what it buys does.

If central banks are buying, why does the price keep falling?

Central banks and short-term traders interact with the gold market in fundamentally different ways, which is why one group buying heavily doesn't immediately stop the price from falling. A central bank adding tonnes of reserves typically buys gradually and privately — directly from mines it controls, or bit by bit through major banks — specifically to avoid moving the price against itself on the day of purchase. Short-term traders do the opposite: they transact in highly leveraged futures and other paper-gold instruments on exchanges where price updates every second, so selling pressure from that side of the market is amplified and immediate.

Add in a real near-term headwind — oil prices roughly 40% higher since July amid regional conflict, pushing inflation expectations up and keeping pressure on central banks to consider higher interest rates rather than lower ones — and it's easy to see why gold can keep falling in the short term even while the longer-term reserve-accumulation story stays intact. Higher rates make interest-bearing assets more attractive relative to gold, which pays no yield of its own, so some traders rotate out of gold into those assets regardless of what central banks are doing on a multi-month basis.

The 2020-2022 playbook: a similar setup, with a long accumulation phase

This isn't the first time this exact pattern has reportedly played out. Central banks were buying roughly 650 tonnes of gold a year heading into 2020. When COVID-era demand pushed gold to a record near $2,075 that August, central banks pulled back sharply, and for the first time in roughly a decade, reportedly sold more gold than they bought in a quarter. As gold then fell, buying resumed — until February 2022, when the invasion of Ukraine pushed oil and inflation sharply higher and the Fed resumed raising rates. Gold fell about 22% to roughly $1,600 by that September, and in the same quarter, central banks reportedly bought a record amount for any quarter since 1950s record-keeping began.

What happened next matters more than the drawdown itself: it reportedly took until the end of 2023 — more than a year after that low — for gold to reclaim and hold its prior record. The run from roughly $2,000 at the end of 2023 to the ~$5,600 level referenced earlier in this guide took place over the following two years, not overnight. Central bank accumulation at a low doesn't mean a quick bounce; historically, it's described a slow, uneven accumulation phase that can last well over a year before any sustained move follows — and there's no guarantee that pattern repeats this time.

Staged buying during a drawdown: the concept, not a price target

One common approach some investors use during a drawdown like this is a pre-committed, staged buying plan: deciding in advance to add a fixed amount at specific price levels on the way down, rather than trying to guess the exact bottom in real time. The appeal is that it removes the emotional decision of "is this the bottom yet" from each individual purchase — the plan was already made before the price got there.

This guide deliberately doesn't publish specific price levels to buy at — any such level is a trade call, not an explanation of a mechanism, and it would be stale the moment market conditions shift. The full case for this approach, including what past drawdowns and recoveries actually looked like, is covered in Dollar-Cost Averaging vs. Panic-Selling Gold. Track how a staged gold allocation fits into your broader finances, rather than in isolation, with the tracker below.

For current gold and silver rates rather than the historical figures cited throughout this guide, OmniFin's own Live Market Analysis dashboard pulls live metals pricing. If you're calculating zakat on gold holdings specifically, the Zakat Calculator uses the same live rates with the nisab thresholds applied.