Central banks added 244 tonnes of gold in Q1 2026, the largest quarterly total on record and a 160% increase year-on-year, according to preliminary data from the World Gold Council. The buying spree has been the single most important structural support for gold prices through the 2024-2026 bull run.
The pace moderated in Q2. The People's Bank of China reported 24 tonnes of additions in May, its twelfth consecutive month of purchases, but below the 30-tonne monthly average seen in Q1. Poland, India, and the Czech Republic remain active buyers, while Turkey has slowed purchases after a large 2025 accumulation.
The rationale for central bank gold accumulation remains intact. Reserve managers cite three drivers: de-dollarization and sanctions risk (following US-led asset freezes on Russia's reserves in 2022), negative real yields on government bonds in several major currencies, and portfolio diversification against a shifting geopolitical landscape.
Global official gold reserves now exceed 1,200 tonnes for the first time, a figure that does not account for unallocated or gold-linked derivatives. This structural demand floor has prevented gold from breaking below $3,800 even during sharp paper-market selloffs.
The Q2 moderation does not signal a reversal — it reflects price sensitivity at higher levels. PBOC buying tends to slow when gold is above $4,500 and accelerate on dips below $4,000, which creates a natural price-stabilizing mechanism.
Central bank buying creates a structural floor that limits downside. Even with a hawkish Fed and strong dollar, the 1,200-tonne reserve base absorbs selling pressure. For procurement, this means gold will remain supported above $4,000 absent a systemic shock. Use dips to $4,000-4,200 for hedging.