(Mike Maharrey, Money Metals News Service) Higher gold prices have put a damper on central bank gold buying, but the World Gold Council still categorized August purchases as “firm.”
Globally, central banks added 10 tonnes of gold to their reserves in August.
The slowdown in buying was evident in the second quarter. Central banks globally added 166 tonnes of gold to their reserves in Q2. That was a 33 percent quarter-on-quarter decline and the lowest quarterly demand since Q2 2022.
However, gold buying was still 41 percent above the quarterly average that was typical between 2010 and 2021.
The World Gold Council notes that while central banks tend to make reserve decisions strategically, they are not totally insensitive to prices.
“As such, gold’s rally so far this year, up 26 percent, to new record levels, has likely contributed to the slowdown in central bank buying. But that they continue to add gold in the face of a higher price underscores their continuing favorable attitudes towards gold as a strategic asset amid such uncertainty.”
In August, banks made smaller purchases, and several regular buyers were conspicuously absent.
Kazakhstan was the biggest gold purchaser in August, adding 3 tonnes of gold to its reserves. The Kazakh central bank has increased its gold holdings by 25 tonnes this year, ranking it third behind Poland and the State Oil Fund of Azerbaijan.
Turkey added 2 tonnes of gold to its holdings. The Turkish central bank has been a net purchaser for 26 consecutive months – since June 2023.
The Czech Republic has also been a regular purchaser, adding 1 to 3 tonnes monthly since March 2023. The Czech central bank increased its holdings by another 2 tonnes in August.
China has reported an increase in its official reserves for 9 straight months, adding 2 more tonnes in August. The People’s Bank of China has increased its official holding by 36 tonnes in that span.
Notice the emphasis on “official.”
China is one of the central banks that likely holds significantly more gold than it publicly discloses. As Jan Nieuwenhuijs has reported, the People’s Bank of China is secretly buying large amounts of gold off the books. According to data parsed by the renowned Money Metals researcher, the Chinese central bank is currently sitting on more than 5,000 tonnes of monetary gold located in Beijing – more than TWICE what has been publicly admitted.
Poland and India stood pat in August. Even so, Poland remains the biggest gold buyer so far in 2025.
Official Polish gold holdings total 515 tonnes, making up about 22 percent of its reserves, and Poland now holds more gold than the European Central Bank.
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.
While it does not show up in the buying statistics, Uganda announced a two-to-three-year pilot program to purchase gold domestically from artisanal miners/ Officials say the plan is to build official reserves and reduce reliance on traditional foreign assets.
Uganda has substantial gold reserves, although they likely aren’t as substantial as the government claims.
Despite the slowdown in central bank buying, the World Gold Council remains bullish.
“We maintain our view that central banks will continue to add gold to their reserves. Our Central Bank Gold Reserves Survey 2025 shows that respondents overwhelmingly (95 percent) expect global central bank gold reserves to increase over the next 12 months, while 43 percent believe that their own gold reserves will also increase over the same period. Notably, none of the respondents anticipate a decline in their gold reserves.”
You can read more details about that central bank survey HERE.
On net, central banks officially increased their gold holdings by 1,044.6 tonnes in 2024. 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.
To put that into context, central bank gold reserves increased by an average of just 473 tonnes annually between 2010 and 2021.
World Gold Council analysts expect the trend to continue, with buying “close to the range seen over the past three years on continued elevated trade-related risks and uncertainty premia in U.S. assets.”
The WGC also noted that “diversification” with “a reduction of U.S. assets” is one of the factors driving central bank gold buying. In other words, de-dollarization.
“We don’t see an end to this narrative unless there is a material shift in geopolitical tensions. The IMF has downgraded growth prospects in the U.S. more than in other major economies, citing policy uncertainty. This suggests that other countries may have leverage in negotiations, although these typically last months and years, not weeks. Hence, we don’t expect any near-term resolutions.”
Mike Maharrey is a journalist and market analyst for Money Metals 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.
