Central authorities purchase gold straight from producers.
**Central Banks Boost Gold Reserves, Driving Up Prices**
In a notable shift, central banks worldwide have significantly increased their gold purchases, a trend that has been ongoing for the past three years. According to the World Gold Council (WGC), central banks have been accumulating over 1,000 tonnes of gold per year, a figure far exceeding the previous decade's average of 400-500 tonnes annually [1].
This surge in gold buying has been reflected in the prices of the precious metal. Gold prices have reached new highs, with the yellow metal maintaining levels around $3,345 recently, after touching an all-time high of $3,500 in April 2025 [1][4]. The WGC attributes this relationship to two primary factors: diversification and risk mitigation, and safe-haven demand [4].
Central banks are diversifying their assets to counter geopolitical and economic uncertainties, and gold, being a traditional safe-haven asset, has seen increased demand during periods of economic and trade policy uncertainties [4].
The WGC's 2025 survey revealed that 43% of central bankers anticipate their banks to increase gold reserves, and an impressive 95% believe global official gold reserves will continue to grow in the next 12 months [1].
Interestingly, the survey also indicated a shift towards buying gold from local small-scale miners. While 36 respondents were already purchasing gold in this manner, another four plan to do so [1]. This trend is particularly prominent among central banks in Africa and Latin America, who are looking to support local industries and expand their reserves efficiently [1].
Moreover, 73% of survey respondents expect a reduction in dollar reserves over the next five years, a figure that represents a marked increase from the 62% reported last year [2].
The WGC has not provided any new information about the gold prices in terms of local currencies. However, they have stated that the increase in gold purchases is linked to a 26% rise in gold prices in USD during the first half of 2025 [1]. As central banks continue to accumulate gold, the impact on global financial markets and gold prices will undoubtedly remain a topic of interest for economists and investors alike.
[1] World Gold Council (2025). Central Bank Gold Demand Trends. [2] World Gold Council (2025). Official Gold Reserves Survey. [3] World Gold Council (2025). Gold Demand Trends Half Year Report. [4] World Gold Council (2025). Gold Demand Outlook 2025.
Central banks' increased gold purchases are contributing to a rise in gold prices, as they seek to diversify their assets and mitigate risks. Given the ongoing trend, 43% of central bankers anticipate their banks to increase gold reserves in the coming year, and 95% believe global official gold reserves will continue to grow.
