Central banks are building a haven of bullion assets
Central bank
gold appetite, although not as voracious as the 1,000-tonne-a-year purchases in the past three calendar years, remains largely undiminished globally as this group of institutional buyers diversifies its asset base beyond the customary dollar-denominated holdings in a world increasingly strewn with tariff snags.
Central banks net bought 166 tonnes of gold in three months to June, 33% lower quarter-on-quarter,
World Gold Council
(WGC) data showed. While this is the lowest quarterly number since June 2022, it is 41% higher than the average quarterly level seen between 2010 and 2021, before buying ramped up sharply in more recent years, WGC data showed.
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For the first half (H1) of 2025, the number stood at 415 tonnes compared to 525 tonnes in year ago. This is also the lowest first half since 2022. Elevated
gold prices
amid destabilising economic and geopolitical environment has likely contributed to the slowdown in central bank buying, WGC said.
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According to
Madhavankutty G
, chief economist at Canara Bank, the central banks' gold purchases fit perfectly into the de-dollarisation theme, where countries want to diversify their foreign exchange reserves. Though the dollar is still dominant in FX reserves, its share is coming down drastically, with gold benefiting from this shift.
"The added benefit of gold is also the safety aspect. The
US tariffs
have increased the geopolitical as well as global economic uncertainty, which in turn is expected to keep gold prices elevated. Historically, US Treasury yields and gold prices were inversely related. That relationship has broken now. So even as yields are expected to remain above 4.30%, gold demand prices may also remain high," he said.
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Although central banks typically are strategic buyers of gold, they are not completely insensitive to its price level. "But that they continue to add gold in the face of a higher price underscores their continuing favourable attitudes towards gold as a strategic asset amid such uncertainty," it said.
According to WCG, the longer-term trend of central banks taking advantage of gold's diversification properties and reallocating from US assets to gold remains intact.
The Reserve Bank of India (RBI) bought nearly half a tonne of gold in the last week of June after a relatively conservative spell of bullion shopping in the current fiscal year, ET reported earlier. The
RBI
's outstanding stock of gold amounted to nearly 880 tonnes as of June 27. Its share in India's foreign exchange reserves climbed to 12.1% as of July 18, 2025, from 8.9% as of July 19, 2024.
WGC's Central Bank Gold Reserves Survey 2025 revealed that 95% expect gold reserves to increase over the next 12 months. The results of the survey, which collected data from 73 of the world's central banks, were published in mid-June.
The National Bank of Poland was the largest buyer of gold, adding 19 tonnes to its gold reserves in the June quarter, while China's reported purchases amounted to 6 tonnes, half of what it bought in the March quarter. China's gold reserves now stand at 2,299 tonnes, WCG data showed.
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