The world gold price has remained around the threshold of 3,345 USD/ounce for more than two months, after reaching a record of 3,500 USD/ounce in April. Although the price has reached its peak, the net buying trend of central banks has not stopped.

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

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

2024 will see a record 1,180 tons of gold purchased by central banks, higher than 1,037 tons in 2023 and 1,082 tons in 2022. The United States currently leads the world with 8,133 tons of gold, followed by Germany, Italy, France, Russia, China...

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

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Central banks are aggressively buying gold. Photo: Kitco

Where does the gold supply come from?

Central bank gold supplies are quite diverse. The global over-the-counter (OTC) market accounts for 32% of 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 supply comes from artisanal and small-scale mining.

Notably, 47% of central banks surveyed said they buy 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 the two main reasons why central banks are increasing their reserves.

A weaker US dollar is also a key driver of gold prices. Mr Trump’s tariff policies are putting pressure on the greenback, causing the US dollar index to fall 9.8% year-to-date and fall below 100 for the first time.

In addition, the Trump administration's pressure strategy on Fed Chairman Jerome Powell has raised concerns about the Fed's independence, thereby creating further pressure on the USD to depreciate.

According to the latest report, the US public debt could increase by more than 3,900 billion USD due to the bill "Trump's One Big, Beautiful Bill". Moody's Ratings has downgraded the country's credit rating due to concerns about the burden of public debt and growing budget deficit.

Financial institutions believe that central bank buying is one of the factors that will cause gold prices to continue to rise in the future. Goldman Sachs and JPMorgan both forecast gold prices to reach $4,000/oz by mid-2026, when the risk of recession and trade tensions escalate.

JPMorgan alone forecasts an average price of $3,675 by the end of 2025, before jumping 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