Will Gold Keep Rising

Since 2020 gold price climbed more than 230% at the same time central banks started one of the biggest buying waves in decades. 15 biggest buyers alone added almost 2,000 tonnes over five years.

• Central bank buying is slow but powerful, it creates a steady demand floor that can support long term price trends even when short term sentiment turns negative.

The biggest buyer is China - adding more than 350 tonnes. As you can see it’s a part of a broader strategy. China holds large foreign reserves, historically in dollar assets. But now they are increasing gold and reducing dependence on the U.S. financial system and adding an asset that cannot be frozen or printed.

When a large economy buys for political and financial independence, those purchases tend to continue for years, meaning - longrun bullish pressure on gold prices.

Right behind China is Poland with over 300 tonnes. Poland’s motivation is financial security. Gold acts like emergency collateral, it can be sold or used to stabilize currency confidence. Geopolitical risk spikes trigger both short term price jumps and medium term reserve accumulation cycles.

Other major buyers included Türkiye and India. Both economies have struggled with inflation and currency volatility in recent years. When a local currency weakens or consumer prices rise fast, central banks often add gold because it keeps value better than paper money. Strong inflation in large emerging markets can translate into additional official gold demand.

Brazil added more than 100 tonnes. Azerbaijan increased holdings through its state oil fund. Meanwhile Japan, Thailand, Hungary and Singapore also expanded reserves.

When buying spreads across both emerging and developed economies, it signals global uncertainty about inflation, debt levels, and currency stability.

• Note:Broad participation strengthens long duration uptrends and reduces the probability of deep multi year bear markets.

The largest reduction came from the Philippines, which cut more than 65 tonnes. Kazakhstan and Sri Lanka also reduced reserves, mostly due to liquidity needs during economic stress. This type of selling is to support domestic currency or repay debt. So emergency sales can create short term downward pressure, but they rarely change the long term global trend because they are temporary.

Germany and Finland made only small reductions, while Switzerland barely changed holdings at all. Gold heavy countries manage reserves more passively.

Key Takeaway

Gold is moving because many central banks are steadily buying and holding more gold. When governments buy thousands of tonnes, it creates constant underlying demand in the market.

This doesn’t mean prices can’t drop. Gold can still fall if interest rates go higher or if the U.S. dollar becomes stronger, because both make gold less attractive in the short term. But this steady government buying makes it harder for gold to stay in a long, deep bear market, unless central banks stop buying or start selling.

Gold drops because of short-term economic news, large institutional buyers are now more likely to step in and buy those dips.

• Momentum traders - steady central bank buying makes upside breakouts more reliable, because there is stronger long term demand behind the move.
• Swing traders - key support levels are more likely to hold during periods of global uncertainty, since buyers tend to appear near those zones.

Steady background demand also helps explain why gold has remained relatively strong even while interest rates stayed high, a situation that in the past would usually have pushed gold prices down much more.