Official sector demand remains the backbone of the gold market. Since Russia’s invasion of Ukraine in 2022, central banks, particularly across emerging markets, have accelerated reserve diversification in response to sanctions risk, geopolitical fragmentation and a desire to reduce reliance on the US dollar. Crucially, this demand has proved steady and largely price insensitive.
Poland, the world’s largest reported gold buyer last year, has signalled further purchases as it targets a higher absolute level of gold holdings rather than a fixed share of reserves. It is now targeting around 700 tonnes of gold, up from roughly 550 tonnes, rather than a fixed 30% share of reserves. This underscores that reserve accumulation remains strategic, not tactical.
China’s central bank also extended its gold buying to a fifteenth month in January.
As long as geopolitical fragmentation persists, a meaningful reversal in central bank gold demand looks unlikely. This structural floor continues to underpin the market at elevated price levels.
