(Kitco News) - Central bank demand has been a critical factor behind gold’s unprecedented rise to record highs above $4,000 an ounce. Analysts note that while demand may slow at higher prices, the trend is unlikely to disappear anytime soon, as new central banks are expected to enter the marketplace.
Citing the latest data from the International Monetary Fund, Krishan Gopaul, Senior Analyst for EMEA at the World Gold Council, said in a social media post on Thursday that the Central Bank of Brazil bought nearly 16 tonnes of gold in September.
He added that this is the first time Brazil has increased its gold reserves since 2021.
“Its gold holdings now total 145 tonnes,” Gopaul said.
While reserve data continues to be updated through the IMF, it appears that Brazil was the most active central bank in the gold market last month. By comparison, the People’s Bank of China bought only 1 tonne of gold during the same period — the slowest pace of purchases since it began its buying spree in 2022, not counting the six-month pause in 2024.
Gopaul also noted that the Czech National Bank increased its official gold reserves by almost 2 tonnes. Through steady accumulation this year, the central bank has purchased 16 tonnes of gold to date in 2025.
According to some analysts, markets will be paying close attention to Brazil’s activity in the gold market, as the country is part of the BRICS+ economic alliance, which includes Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
In a recent interview with Kitco News, Robert Gottlieb, an independent precious metals industry expert and former Managing Director of the precious metals desks at JPMorgan and HSBC, said rising geopolitical and economic uncertainty is fueling demand for gold, with central banks diversifying away from the U.S. dollar and U.S. Treasuries.
“Gold is a completely different asset because of the global geopolitical and economic uncertainty around the world,” he said. “Countries are starting to tell themselves, ‘Hey, we need to diversify away from the dollar.’ They’re doing so because globalization is ending. They are diversifying into gold because it is not a fiat currency, and it is not based on the credit or faith of any specific country.”
Looking at the broader marketplace, in the 1970s, gold represented about 74% of total central bank official reserves. That share dropped to around 20% by the 1990s – but it has now surged back up to 40%.
Tavi Costa, Partner and Macro Strategist at Crescat Capital, noted last month that, for the first time since 1996, central banks hold more gold than U.S. Treasuries.
Although central bank official holdings have increased significantly over the past three years, Costa said there is still room for further growth. He added that he would not be surprised if reserves eventually rose back to the levels seen 50 years ago.
