Central banks ended a three-year run of heavy gold buying in 2025, with net purchases falling below 1,000 tonnes to 863 tonnes, after record accumulation in 2022–2024. According to the World Gold Council (WGC), elevated gold prices led to more cautious buying, even though long-term strategic interest in gold remains intact.
Of 24 central banks surveyed, 22 increased reserves, though most purchases were concentrated among seven institutions. DSP’s Netra report noted that strong gold buying reflects reduced confidence in the US dollar, with gold overtaking US Treasuries as a reserve asset on a mark-to-market basis.
Despite slower central-bank buying, total gold demand crossed 5,000 tonnes for the first time, supported by a 45% price rally and 53 new all-time highs, creating an estimated $555 billion wealth gain. Investment demand led the surge: global gold ETFs added 801 tonnes, while bar and coin buying hit a 12-year high.
DSP cautioned that ETF-led rallies are momentum-driven and often short-lived. Investors are advised to avoid fresh exposure at current levels and consider booking profits after the strong run.
Frequently Asked Questions
Why did central banks buy less gold in 2025?
Gold prices were at record highs, prompting central banks to slow purchases and take a more cautious, price-sensitive approach.
Did central banks stop buying gold altogether?
No. Most continued buying—22 out of 24 institutions increased reserves—but purchases were smaller and concentrated among a few large buyers.
Does this mean gold is no longer strategic for central banks?
Not at all. The World Gold Council says gold remains a key long-term asset for diversification and risk management.
What is the outlook for investors now?
DSP advises caution. ETF-led rallies are momentum-driven, and after a sharp run-up, investors may be better off booking profits rather than taking fresh positions.
