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Futures, Indices, and Commodities · Metals

Central bank gold buying

Understand how emerging-market central banks have changed the structural bid for gold since 2022.

3 min read+25 XPLesson 31 of 49
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Futures, Indices, and Commodities

Metals

Lesson 31 of 4963%
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Lesson 31 of 49Futures, Indices, and CommoditiesMetals

Today's tiny win: make one idea click.

Understand how emerging-market central banks have changed the structural bid for gold since 2022.

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The new structural bid

Central banks — the institutions that issue currency and hold national reserves — have always owned some gold. What's new is the pace. Since 2022, central bank gold purchases have hit roughly 1,000 tonnes a year, which is about double the 2010-2021 average. That's a structural buyer the gold market hadn't seen at this size in decades.

Why now? In February 2022, after Russia invaded Ukraine, Western countries froze hundreds of billions of dollars of Russian central bank reserves held abroad. That sent a message to every other central bank: dollar reserves can be turned off. Countries that worried about future sanctions — or just wanted to diversify — quietly started buying gold. China, Turkey, India, Poland, and others have been the largest buyers. Gold doesn't get frozen by another government, and that's the entire appeal.

Wick stands by a central bank building with a Gold buyer badge and notes for about 1,000 tonnes a year, double the old pace, since 2022, showing a big new steady buyer of gold.Central banksGoldbuyerAbout 1,000tonnesTwice theold paceSince 2022
Wick saysSince 2022, central banks buy about 1,000 tonnes of gold a year, double the old pace.
Wick thinks that dollar reserves can be frozen but gold cannot, teaching why the 2022 sanctions on Russian reserves sparked a rush of central bank gold buying.Dollar reserves canbe frozen. Gold can't.?
Wick saysFreezing Russia's reserves in 2022 pushed other central banks toward gold.

How to use this as a trader: don't try to time central bank reports — they're released quarterly with a lag. Instead, treat the structural bid as background. When real yields rise but gold refuses to break a key support level, suspect the structural buyer is absorbing supply. When gold rallies on no obvious headline, suspect the same. The relationship between gold and real yields isn't broken; it's just dampened by a second buyer that doesn't care about yields.

Wick holds a shield labeled Big buyers against falling candles marked rising real yields, showing how steady central bank demand cushions gold without cancelling the yield effect.Rising real yieldsGold holds supportBigbuyers
Wick saysCentral bank buying can soften gold's drop when real yields rise, but not remove it.

Recap: emerging-market central banks have doubled their gold buying since 2022. The catalyst was Russia sanctions. The effect is a structural bid that dampens — not removes — gold's old reaction to real yields.

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1. What event in 2022 catalyzed the surge in central bank gold buying?

2. Real yields are rising. How should you think about gold given the central bank bid?

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