(Mike Maharrey, Money Metals News Service) Official central bank gold buying started 2025 the same way it ended 2024 – strong.
Globally, central banks added a net 18 tonnes of gold to their holdings in January.
A World Gold Council analyst said, “The sustained buying highlights the strategic importance of gold in official reserves, particularly as central banks navigate heightened geopolitical risks.”
The Central Bank of Uzbekistan was the biggest buyer in January, adding 8 tonnes of gold to its reserves. The Uzbek central bank holds the bulk of its reserves in gold (82 percent). Like other central banks that buy significantly from domestic gold production, the Central Bank of Uzbekistan tends to shift back and forth between buying and selling.
The People’s Bank of China publicly returned to the table in November after a six-month pause in reporting gold purchases. The Chinese central bank was the second-biggest buyer in January, adding another five tonnes of gold to its official reserves. That pushed its official gold holdings to 2,285 tonnes, about 6 percent of its total reserves.
Notice the emphasis on “official.”
The Chinese likely hold significantly more gold than they publicly disclose. Jan Nieuwenhuijs reported that the People’s Bank of China secretly bought large amounts of gold, even as official buying was on pause. The renowned Money Metals researcher has shown that the Chinese central bank covertly purchases gold in the London Bullion market through bullion banks.
Kazakhstan added 4 tonnes of gold to its reserves in January. The National Bank of Kazakhstan is another central bank that swings back and forth between buying and selling.
Poland was the biggest gold buyer in 2024, and it continued to add to its reserves in January, with another 3 tonnes in purchases. Last year, the Polish central bank expanded its gold holdings by 90 tonnes, boosting gold to about 18 percent of its total reserves.
Last year, National Bank of Poland Governor Adam Glapiński indicated the central bank plans to increase its gold holdings to 20 percent of its reserves.
“This makes Poland a more credible country, we have a better standing in all ratings, we are a very serious partner, and we will continue to buy gold.”
India continued to add gold to its reserves with a modest 3-tonne purchase in January. The Reserve Bank of India was ranked third in gold buying last year, adding 73 tonnes to its holdings.
An Indian economist told the Times of India that the push to accumulate gold was based on both political and economic reasons. He said that the “reliability” of the U.S. dollar has “diminished.” He noted the “noticeable decline” in the confidence in U.S. dollar assets. Another economist told the Times, “It makes a lot of sense (to invest in gold), given the increased volatility in the FX market, elevated interest rates in the U.S., and, of course, also as the central banks in each economy would like to diversify the asset classes in which they are parking their reserves.”
The Czech National Bank added 2 tonnes of gold to its reserves, and the Qatar Central Bank added 1 tonne.
There were three notable sellers in January. Russia and Jordan both reduced gold reserves by 4 tonnes, and the National Bank of Kyrgyz sold 2 tonnes.
Official central bank gold demand topped 1,000 tonnes for the third straight year in 2024. To put that into perspective, central bank gold reserves increased by an average of just 473 tonnes annually between 2010 and 2021.
On net, central banks officially increased their gold holdings by 1,044.6 tonnes last year. It was the 15th consecutive year of expanding gold reserves.
Last year was the third-largest expansion of central bank gold reserves on record, coming in just 6.2 tonnes lower than in 2023 and 91 tonnes lower than the all-time high set in 2022. (1,136 tonnes). 2022 was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.
The World Gold Council summed up the current central bank demand.
“Central banks continue to play a pivotal role in global gold demand, with their purchasing patterns influenced by both economic and geopolitical shifts. The shift from armed conflict to broader economic tensions has reinforced their net buying trend, especially apparent since 2022. Many central banks appear to have strategically leveraged temporary price pullbacks as buying opportunities, while sales have remained limited and largely tactical during price rallies.”
Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
