Global gold prices have remained around $3,345 per ounce for over two months, after hitting a record high of $3,500 per ounce in April. Despite prices reaching their peak, the net buying trend by central banks has not yet stopped.

The World Gold Council (WGC) Central Bank Gold Reserves Survey 2025 shows that 43% of governors forecast central banks will increase reserves, while 95% believe this trend will continue for at least the next 12 months.

According to the WGC, central banks added 166 tons of gold to their official reserves in the second quarter alone. The average 12-month purchase reached 27 tons. Kazakhstan, Türkiye, Poland, and China were the biggest buyers in May.

In 2024, central banks recorded a record 1,180 tons of gold purchases, exceeding the 1,037 tons of 2023 and 1,082 tons of 2022. The United States currently leads the world with 8,133 tons of gold, followed by Germany, Italy, France, Russia, China, and others.

Precious metals market research/consulting firm Metals Focus estimates that by 2025, central banks will continue to accumulate around 1,000 tonnes of gold, marking the fourth consecutive year of strong demand.

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Central banks are aggressively accumulating gold. Photo: Kitco

Where does the gold supply come from?

The supply of gold to central banks is quite diverse. The global OTC market contributes 32% of the purchases. This is a decentralized market where transactions take place directly between parties without going through an exchange.

Domestic production accounts for 25%, mainly from large-scale mines. In addition, 17% of the supply comes from artisanal and small-scale mining.

Notably, 47% of central banks in the survey indicated they purchase gold from both industrial and artisanal sources.

Why do central banks hoard gold?

Gold has long been considered an international reserve asset. In the current context, rising inflation and geopolitical tensions are two main reasons why central banks are increasing their gold reserves.

The weakening US dollar is also a significant factor driving up gold prices. Trump's tariff policies are putting pressure on the greenback, causing the USD index to fall 9.8% year-to-date and drop below 100 for the first time.

Furthermore, the Trump administration's strategy of pressuring Fed Chairman Jerome Powell has raised concerns about the Fed's independence, thereby adding further downward pressure on the USD.

According to the latest report, the US public debt could increase by more than $3.9 trillion due to "Trump's One Big, Beautiful Bill." Moody's Ratings has downgraded the country's credit rating due to concerns about the growing public debt burden and budget deficit.

Financial institutions believe that central bank buying is one of the factors driving gold prices higher in the future. Goldman Sachs and JPMorgan both project gold prices reaching $4,000/oz by mid-2026, amid the risk of recession and escalating trade tensions.

JPMorgan, in particular, forecasts an average price of $3,675 at the end of 2025, before surging to $4,000 in the third quarter of 2026.

Source: https://vietnamnet.vn/gia-vang-tang-manh-ai-dang-ban-vang-cho-ngan-hang-trung-uong-2437218.html