Central banks purchased a net 244 tonnes of gold in Q1 2026 alone, according to the World Gold Council's Gold Demand Trends report. The buying continues a structural shift triggered by the 2022 freezing of approximately $300 billion in Russian reserves held in Western institutions. Emerging-market central banks are diversifying away from dollar-denominated reserves into gold at an accelerating pace.
China has been one of the most consistent buyers, though at 9% of total reserves, its gold allocation still trails far behind the US (69%) and Germany (69%). Other major buyers include India, Turkey, Poland, Hungary, and several Middle Eastern and Central Asian nations. State Street's 2026 gold outlook expects this to mark the 17th consecutive year of net official sector purchases since the Global Financial Crisis.
The impact on gold pricing is significant. 'Price inelastic central banks continue to provide a steady source of gold demand, lifting the price floor and dampening downside price volatility,' State Street notes. This structural buying is a key reason gold remains elevated at $4,500+ despite headwinds from a strong dollar and higher-for-longer interest rates. Even as speculative futures selling pressures prices, physical central bank buying absorbs available supply.