National Capital
Fri, Nov 13, 2026, 03:56
Central banks are buying gold again
15:56
According to the World Gold Council (WGC), central banks increased their gold reserves by 321 tonnes in the third quarter of 2026. That is 42% more than a year earlier and the highest quarterly volume of purchases since late 2024. Since the start of the year, central banks have bought 675 tonnes, 6% more than over the same period last year. The WGC itself identifies portfolio diversification and risk management as the main motivations.
Part of the surge can be explained by market conditions. According to WGC strategist John Reade, central banks likely took advantage of falling gold prices during the quarter. Central banks expecting the dollar to weaken may have seen its temporary strengthening as a good opportunity to shift some reserves into gold. The underlying reason, however, is not tactical. After Russian reserves were frozen in 2022, many countries learned that foreign-currency assets held in Western jurisdictions can become inaccessible for political reasons. Physical gold, especially when held domestically, is not vulnerable in the same way. This helps explain the sustained demand from the official sector, which has continued for several years.
The broader market picture is mixed. Total gold demand fell by 1% in the third quarter, to 1,369 tonnes, but rose by 22% in value, to $188 billion. In other words, less gold is being bought, but at a higher price. The retail segment is weakening. Demand for bars and coins fell by 19%, while jewellery demand had its weakest third quarter on record, according to the WGC. Investment demand through exchange-traded funds, however, returned. Inflows totalled 211 tonnes, and holdings reached a record 4,256 tonnes. Gold is increasingly becoming an instrument for institutional investors and governments, rather than households, for whom it has simply become more expensive.
The WGC sees the outlook as mixed. High interest rates, which developed economies are raising again in their fight against inflation, could weigh on demand for an asset that pays no interest. Geopolitical tensions and instability in financial markets, by contrast, could support it.
Russia was among the first countries to bet on gold in its reserves, and the experience of 2022 essentially confirmed the soundness of that strategy. Today, global central-bank demand for the metal supports its price—and therefore the value of Russia’s gold reserves, as well as the revenues of Russian gold producers, some of the largest in the world. In addition, the Ministry of Finance uses gold sales from the National Wealth Fund to finance the budget, so high prices also increase the government’s fiscal capacity.
Author: Candidate of Economic Sciences, Associate Professor, Department of World Economy and International Finance, Financial University under the Government of the Russian Federation Tatyana Aleksandrovna Gorbacheva
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