(Kitco News) - Central bank demand has played a key role in supporting gold prices at elevated levels. While the market has been dominated by a few key players, demand continues to broaden as the Central Bank of the Republic of Kosovo jumps into the market.
The central bank announced on Wednesday that, for the first time in its history, it had added gold to its official reserves.
“This development represents an important institutional achievement and reflects the continued modernization of CBK’s reserve management framework. The inclusion of gold further strengthens the diversification, resilience, and long-term sustainability of the reserve portfolio, while aligning CBK’s investment practices with contemporary international standards and sound central banking practices,” the Eastern European central bank said in a press release.
The central bank did not say how much gold it bought, but said that gold’s inclusion in its official reserves represents an initial step in a longer-term strategic allocation process.
“Gold has traditionally played an important role in central bank reserve management as a long-term store of value and an instrument of diversification. For CBK, its inclusion represents a strategic step toward further strengthening the resilience of the reserve portfolio, mitigating risks, and supporting long-term financial stability,” the central bank said.
Although central bank demand slowed in 2025 compared to the historic levels seen over the previous three years — when global reserves increased by more than 1,000 tonnes annually — analysts expect the official sector market is far from saturated as demand continues to broaden.
In 2025, central banks increased their gold reserves by 863 tonnes, according to data from the World Gold Council. Analysts noted that demand slowed last year as the market entered a parabolic rally. Despite higher prices, central bank demand picked up during the first quarter of this year. The WGC said central bank demand totaled 244 tonnes in the first three months of the year.
The World Gold Council expects central banks to purchase between 700 and 900 tonnes of gold this year.
Analysts expect central banks to continue buying gold because of the growing deglobalization trend, which is weakening the U.S. dollar’s role as the world’s reserve currency.
“The freezing of Russian reserves was a watershed moment. Gold held domestically carries no counterparty risk and remains beyond the reach of foreign sanctions or financial restrictions,” said Ole Hansen, Head of Commodity Strategy, in a report Friday. “As the global economy becomes increasingly divided into competing blocs, gold remains one of the few reserve assets that is universally accepted, politically neutral and controlled by no single government. In short, central bank buying is not about chasing price, but about reducing strategic vulnerability.”
