Gold Remains Well Supported As Central Banks Continue To Buy In 2025

(March 4, 2025 - Neils Christensen, Kitco News)

(Kitco News) - Central banks’ appetite for gold remains unsated as total global reserves increased by 18 tons during the first month of the year, according to the latest research from the World Gold Council (WGC).

The solid demand in January comes after central banks bought 1,045 tons of gold in 2024; this was the third consecutive year that official holdings increased by more than 1,000 tonnes, well above the long-term average.

“The sustained buying highlights the strategic importance of gold in official reserves, particularly as central banks navigate heightened geopolitical risks,” wrote Marissa Salim, Senior Research Lead, APAC at the WGC.

According to the report, emerging market central banks remain at the forefront of net buying. Uzbekistan’s central bank was the biggest buyer in January, increasing its official reserves by 8 tonnes. China also continues to play a dominant role after its central bank bought 5 tons of gold.

This was the third month that the People’s Bank of China increased its gold reserves after taking a six-month break last year. The precious metal now represents 6% of total foreign reserves, which many analysts have said is still low if China wants to compete with the U.S. dollar as a global reserve currency.

Kazakhstan’s central bank was the third largest gold buyer in January; however, it also represents the growing trend in the gold market.

In the report, Salim quoted the National Bank of Kazakhstan Chairman Timur Suleimenov, who said during a press conference that the central bank has “been discussing transitioning to monetary neutrality in gold purchases,” with the aim of boosting international reserves and “protect[ing] the economy from external shocks.” Salim also noted that the NBK is reported to have started selling U.S. dollars as part of “mirroring operations related to gold purchases.”

Meanwhile, the National Bank of Poland and the Reserve Bank of India each bought three tonnes of gold, the Czech National Bank increased its gold reserves by 2 tonnes, and the Qatar Central Bank bought one tonne of gold.

On the selling side, Russia’s central bank and the Central Bank of Jordan each sold three tonnes of gold, and the National Bank of the Kyrgyz Republic saw its reserves decline by two tons.

In her note, Salim said that central banks continue to play a pivotal role in global gold demand, with their purchasing patterns influenced by economic and geopolitical shifts.

“The shift from armed conflict to broader economic tensions has reinforced their net buying trend, especially apparent since 2022. Many central banks appear to have strategically leveraged temporary price pullbacks as buying opportunities, while sales have remained limited and largely tactical during price rallies,” she said.

Looking ahead, many commodity analysts expect that gold will remain well supported as deglobalization trends ramp up. Some analysts have said that President Donald Trump’s tariff threats are pushing many emerging market nations to further diversify away from the U.S. dollar.

On Tuesday, Trump triggered a global trade war after launching 25% tariffs on imported products from Mexico and Canada and an additional 10% tariffs on imports from China.