Central banks do not speculate. They manage their countries' reserves under a long-term mandate: preserving value, guaranteeing stability and protecting the national economy against external shocks. When these institutions, the most conservative in the global financial system, decide to increase their gold reserves massively, they are sending a very clear signal about the state of the international monetary system.
And that signal has been unmistakable for years.
In this article
The numbers that define the cycle
ALL-TIME RECORD
IN 2025
MAY 2026
In 2022 and 2023, central banks bought more gold than in any other year since the gold standard was abandoned in 1971. In 2024 and 2025, the pace of purchases continued above the historical average. China, India, Poland, Turkey, Singapore, the Czech Republic: the list of countries building up reserves is long and varied.
Why central banks are buying gold now
There are several reasons, and they all point in the same direction.
Diversification away from the dollar. For decades, central banks' reserves were held mainly in dollars and in United States Treasury bonds. The freezing of Russian reserves in 2022, following the invasion of Ukraine, was a turning point. It showed that dollar-denominated assets can be blocked by political decision. Gold, stored physically within the country itself, does not carry that risk.
A hedge against structural inflation. Central banks have injected trillions of dollars, euros and yuan into the global financial system since 2008 and, especially, since 2020. That massive monetary expansion has long-term inflationary consequences that gold has historically offset better than any other asset.
Distrust of the sovereign debt system. Global debt, public and private together, exceeds 315 trillion dollars, a level without historical precedent. The countries with the highest debt are precisely those that issue the reserve currencies. Gold has no debt, no issuer and no counterparty, which in that context makes it the purest reserve asset.
"When central banks, the most conservative players in the system, accumulate gold at record pace, they are not speculating. They are hedging risks that they themselves understand better than anyone."
Which countries are leading the purchases
| Country | Gold reserves (approx.) | Trend 2022-2026 |
|---|---|---|
| China (PBoC) | 2,300+ tonnes | Sustained massive buying |
| India (RBI) | 830+ tonnes | Accelerating increase |
| Poland (NBP) | 420+ tonnes | Target of 20% of reserves |
| Turkey (TCMB) | 580+ tonnes | Record purchases in 2023 |
| Singapore (MAS) | 230+ tonnes | Largest purchase in decades |
| Czech Republic (CNB) | 40+ tonnes | Plan to triple reserves |
There is a pattern: these are mostly countries that want to depend less on the Western financial system, and on the dollar in particular, and that see gold as the most independent and most liquid reserve asset there is.
What this means for the price of gold
In 2025, central bank purchases (863 tonnes) made up around 17% of total gold demand, according to the World Gold Council. When that demand stays high year after year, it acts as a structural floor for the price. It does not remove short-term volatility, but it does change the underlying balance between supply and demand.
Gold supply, for its part, grows very slowly. Mining output has been stagnant for years, the large deposits are mature, new discoveries are scarce and the cost of extraction keeps rising. With demand structurally trending upward and supply unable to respond at the same speed, the long-term context is favourable.
The signal the private investor should not ignore
Central banks have access to macroeconomic information, risk analysis and long-term models that no private investor can replicate. They do not act on fashions or on market sentiment. When they decide to increase their gold reserves systematically and consistently, it is because their models, and their institutional experience, tell them it makes sense.
A private investor does not need to buy tonnes of gold to apply the same logic. A position in physical gold, in proportion to their wealth and time horizon, can do the same job central banks are after: preserving value and hedging against systemic risks.
The difference is that a private investor can buy investment bars and coins from small amounts, without the custody and logistics costs of moving tonnes of metal. And they own the asset just as fully.
How to position yourself for this cycle
There is no universal formula. The right gold position depends on total wealth, time horizon, exposure to other assets and each investor's risk tolerance. What is consistent with the historical evidence is that a balanced wealth portfolio includes a proportion of real assets, and gold is the most liquid, most universal real asset, with the longest track record of preserving value.
At Equus Capital we help you build a position in physical gold and silver designed for the long term and not dependent on the financial system. First consultation free of charge.