Gold’s role as a hedge against de-dollarization and geopolitical risk is expected to spur central banks who have been absent from the market to buy the precious metal this year, a World Gold Council (WGC) executive said on Tuesday.
In recent months, central banks from Guatemala, Indonesia and Malaysia have all bought gold, either following a long hiatus or for the first time ever, Shaokai Fan, global head of world banks for the WGC said on Tuesday.
“A phenomenon we’ve been seeing in the last few months is new central banks, or central banks that have been inactive or absent from the gold market for a long time, entering the gold market,” he said.
“I think that might be a trend that will continue into 2026,” he said.
Some central banks are also buying gold from small-scale domestic producers to support the local industry and to stop those gold sales going to “bad actors”, Fan added without elaborating.
This month, gold prices have plunged by more than a $1,000 per troy ounce to last trade around $4,340, and historical trends suggest it’s partly due to margin call-related selling, Fan told Reuters on the sidelines of Minerals Week in Canberra.
The record peak for gold was just shy of $5,600 in late January.
During a gold selloff in October, central banks stocked up on the metal, but it’s too early to see if the same phenomenon has occurred with this month’s rout, Fan said.
Central bank demand for gold may decline because higher prices not only deter new buying but also increase the weight of existing gold holdings relative to total reserves, he added.
The WGC expects record gold prices to slow purchases by central banks to 850 metric tons this year from 863 tons in 2025, even though their buying remains elevated when compared to the pre-2022 level, the industry group said in January.
According to WGC figures, central bank buying accounted for some 17% of total demand last year.
(By Melanie Burton; Editing by Kevin Buckland)
