Central banks continued buying gold in October despite record-high prices. Emerging market banks drove the bulk of demand, reinforcing gold’s role as a strategic reserve asset.

Why Are Central Banks Still Buying Gold Even at Record Prices?

Even as gold touched new highs globally, central banks continued accumulating the metal in October, according to the World Gold Council (WGC). Despite elevated prices, demand remained firm, especially among emerging-market banks safeguarding reserves from currency and geopolitical volatility.

Gold crossed $4,381.58 per ounce on October 17, but accumulation didn't stop. October saw 53 tonnes of net buying, marking a 36% month-on-month increase. While overall 2025 buying trails the previous three years, the trend signals that gold remains a preferred hedge against macroeconomic uncertainty, inflation, and shifting global alliances.

🔹 October net purchases: 53 tonnes
🔹 Year-to-date total: 254 tonnes
🔹 Demand led by: Poland, Turkey, Kazakhstan, Brazil
🔹 Russia was the only major central bank to sell — 3 tonnes
🔹 Serbia plans to nearly double reserves by 2030

Investors tracking commodities and macro cycles may consider reviewing current index sentiment using a Nifty Premium Tip to align market exposure with global flows.

Country	October Change	Trend
Poland	16 tonnes	Aggressive accumulation
Brazil	16 tonnes	Second consecutive month
Kazakhstan	41 tonnes	Reserves rebuilding
Russia	-3 tonnes	Profit-taking at highs

The WGC noted that most buying was strategic, not speculative — central banks are reallocating away from the U.S. dollar and reinforcing gold as a long-term reserve asset. The shift also mirrors rising geopolitical polarisation and currency realignments shaping global trade blocs.

Strengths 🔹 Hedge against inflation 🔹 High liquidity global asset 🔹 Trusted long-term reserve

Weaknesses 🔹 No yield generation 🔹 High volatility during rallies

Opportunities 🔹 De-dollarisation trend 🔹 Safe-haven demand rising 🔹 Geopolitical uncertainty

Threats 🔹 Sharp price corrections 🔹 Policy-driven gold liquidation

While the pace of buying slowed relative to earlier quarters, resilience in demand indicates confidence in gold as a long-term hedge. If accumulation continues into Q1, markets may interpret it as a signal of deeper macro uncertainty.

Market-aligned traders may also review a Nifty Premium Trade to balance commodity-driven volatility.

Investor Takeaway

Certified Derivative Pro Tiger and Nifty Expert Gulshan Khera, CFP®, SEBI Registered Investment Adviser, notes that sustained gold accumulation by central banks often precedes larger macro adjustments. For investors, staggered allocation—not aggressive chasing—remains a prudent approach.

More expert insights and actionable trade guidance are available anytime at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.

Related Queries on Gold and Central Bank Buying

• Why do central banks buy gold at high prices?
• Will gold continue outperforming risk assets?
• Which countries are leading the gold-buying cycle?
• Does gold buying signal policy shifts?
• Is gold still a hedge in a digital era?

SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

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