Central Banks Are Buying Gold at Historic Levels

5 min read

If you want to know what the world's monetary authorities really think about money, do not listen to what they say. Watch what they buy. For four years running the answer has been gold. The institutions that issue the world's currencies are steadily swapping paper reserves for the one reserve asset nobody can print. Understanding why they are doing it and how sharply it breaks with the past says a great deal about money today.

The numbers behind the trend

According to the World Gold Council, central banks bought more than 1,000 tonnes of gold in each of 2022, 2023 and 2024. Between 2010 and 2021 the average was 473 tonnes a year. In other words, official buying more than doubled almost overnight and then stayed there.

In 2025 central banks added a further 863 tonnes. That is lower than the three record years before it, but it is still close to double the old norm. Buying also picked up as the year went on, with 230 tonnes added in the final quarter alone. And the World Gold Council estimates that 57 percent of last year's buying was not reported at the time. Much of the demand is quiet, deliberate and out of sight.

Official holdings now stand at around 36,000 tonnes. That is close to the level central banks held in the Bretton Woods era, when the world's major currencies were still tied to gold through the dollar.

A complete reversal

It was not always like this. In the 1990s many European central banks were selling. In 1999 the UK Treasury announced it would sell more than half of Britain's gold reserves at auction. The Swiss National Bank was expected to sell large amounts too. Markets feared a flood of official gold.

On 26 September 1999 the European Central Bank and fourteen other European central banks, the Bank of England among them, signed the Washington Agreement on Gold. They agreed to cap their combined sales at around 400 tonnes a year and 2,000 tonnes over five years. The agreement was renewed in 2004, 2009 and 2014. By 2012, however, sales by the signatories had fallen almost to zero. In 2019 they chose not to renew it at all, because there was so little selling left to limit.

That is the scale of the change. A little over twenty five years ago central banks needed a treaty to stop themselves selling too much gold. Today they are among the largest buyers in the world.

Who is doing the buying

The list is long and it is not confined to one region. Poland was the largest buyer of 2025, adding 102 tonnes to reach 550 tonnes, with gold now making up 28 percent of its reserves. Kazakhstan bought 57 tonnes, a record for the country. Brazil added 43 tonnes. Turkey and China added 27 tonnes each, with China's declared holdings reaching 2,306 tonnes. The Czech central bank has set itself a target of 100 tonnes by 2028.

The intention is not fading. In the World Gold Council's 2025 survey, 73 central banks took part, around half of all those in the world. Of these, 95 percent expected global official gold reserves to rise over the following twelve months. A record 43 percent said they planned to increase their own holdings, up from 29 percent a year earlier. Looking five years ahead, 76 percent expected gold to make up a larger share of total reserves. And 73 percent expected the dollar's share to be lower.

Why the people who print money want gold

These institutions can create pounds, dollars and euros at will. Yet when it comes to their own reserves, they are choosing an asset that cannot be created at all. That tells you a great deal about how they view paper money over the long run.

The survey asked them why. The top answer, chosen by 85 percent, was gold's performance in times of crisis. Close behind, 80 percent pointed to its role as a long-term store of value. These are not the reasons of traders chasing a price. They are the reasons of institutions planning for the worst.

Gold has three qualities no currency can match. It has no issuer, so it cannot be devalued by someone else's policy. It carries no counterparty risk, so it does not depend on any government or bank keeping its word. And when held at home, it sits outside any foreign banking system. In 2022 Western governments froze a large part of Russia's currency reserves. Every central bank in the world took note of what a reserve held in someone else's system is really worth.

The result is already visible in the figures. In June 2025 the European Central Bank reported that gold had overtaken the euro to become the second largest reserve asset held by central banks worldwide, behind only the US dollar. Gold now makes up around 20 percent of official reserves, against 46 percent for the dollar. We covered that milestone at the time in Gold Overtakes the Euro.

A steady floor under the market

Central bank buying matters to private holders because of its character. It is not speculative. It does not chase headlines. It is planned years in advance and carried out patiently. That gives the gold market a deep and persistent source of demand that simply did not exist twenty years ago, when many central banks in Europe were still selling. According to the European Central Bank, buying by the official sector made up more than a fifth of all global gold demand in 2024.

Demand of that size changes how the market behaves. When private traders sell in a panic, there is now a large group of buyers with long horizons waiting on the other side. That does not stop the price from falling. It does mean that falls tend to meet patient buyers rather than an empty room.

The price has reflected the change. Gold passed another milestone in January 2026, setting a new record high. Prices have been far more volatile this spring, with sharp falls as well as rises, as we explained in Why Gold Fell in a War. Central banks have used that weakness to keep adding. Poland bought nearly 13 tonnes in March, during one of the steepest pullbacks of the year.

What savers can take from it

Central banks think in decades, not weeks. They are not trying to time the market. They are reducing their dependence on paper claims issued by others, one tonne at a time. The same principle applies to a household's savings, simply on a smaller scale.

UK savers have one advantage no central bank enjoys. The Britannia and the Sovereign are UK legal tender, so gains on them are exempt from Capital Gains Tax for UK residents. Gold bars do not share this advantage, because a bar is not currency. The Britannia is struck in 999.9 fine gold. Both are recognised around the world. The reasoning that drives the biggest buyers in finance is open to anyone willing to understand it.

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If you would like to talk it through, call a specialist on 0208 064 0076, Monday to Friday, 9am to 5pm, or book a call at a time that suits you.

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Sources

This article is for information only. The value of gold can go down as well as up.

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Gold Insights are independent articles, researched and written by our own team at Gold Tier Advisory.