Central bank gold buying remains resilient despite price pullback

Central banks remain structural buyers of gold in 2026, with aggregate purchases of approximately 186 tonnes in the second quarter through late June. While this pace is slightly below the record 290t added in Q4 2025, it still represents a robust annualized run rate of roughly 750 tonnes.

The People's Bank of China added 34 tonnes to its reserves in May, bringing total PBoC gold holdings to a reported 3,472 tonnes. China's share of gold in total reserves now stands at approximately 6.8%, up from 3.5% in late 2024. The PBoC has been a consistent buyer every month since October 2024.

The Reserve Bank of India added 12 tonnes across April and May, continuing its multi-year accumulation program. India's central bank has purchased 68 tonnes over the past 12 months. Other notable buyers include Kazakhstan (8t in May), Poland (6t), and Uzbekistan (4t).

The pace of central bank buying provides a significant demand floor at current price levels. CB purchases are typically price-insensitive — central banks buy gold for reserve diversification and geopolitical hedging, not for short-term price appreciation. This insulates the physical market from the speculative liquidation driving the current futures selloff.

However, there is a divergence: while central banks buy at spot, the LBMA premium for large bars has narrowed from $2.50/oz in March to just $0.40/oz currently, indicating that the physical over-the-counter market is adequately supplied. The tightness seen during the 2024 bull run has eased considerably.

Structural gold demand from the technology sector is also resilient. The World Gold Council estimates industrial gold demand at 310t in 2026, led by electronics manufacturing and semiconductor bonding wire applications. This is up 4% year-over-year.