Central banks have resumed substantial gold purchases after a brief pause in July. In August, they added a net 19 tonnes to global reserves, with the National Bank of Kazakhstan leading the buying spree. Other notable buyers included the National Bank of Bulgaria and the Central Reserve Bank of El Salvador. This uptick follows a trend where annual net purchases have exceeded 1,000 metric tons since 2022, driven by a desire to diversify away from the U.S. dollar amid geopolitical tensions and economic uncertainties World Gold Council+1.
Notably, central banks now hold more gold than U.S. Treasuries for the first time since 1996, reflecting a strategic shift towards gold as a safer asset Visual Capitalist.
💼 Institutional Investor Trends
Institutional investors are increasingly allocating to gold, with exchange-traded funds (ETFs) seeing a significant surge in inflows. In September 2025, gold ETFs experienced a fourfold increase in inflows, reaching a record high of ₹8,363 crore, driven by concerns over inflation, currency debasement, and economic uncertainty The Economic Times.
Analysts from firms like Goldman Sachs and Société Générale forecast continued strength in gold prices, with projections of $4,900 per ounce by December 2026 and $5,000 per ounce by 2027, supported by ongoing central bank demand and a weakening U.S. dollar Reuters+1.
📈 Market Impact
The combined actions of central banks and institutional investors are propelling gold prices to new heights. Gold recently surpassed $4,000 per ounce, marking a 50% increase year-to-date, and is projected to continue its upward trajectory New York Post.
This bullish trend is underpinned by factors such as geopolitical instability, inflation concerns, and a weakening U.S. dollar, which enhance gold’s appeal as a hedge against economic uncertainties.
🔍 Conclusion
The concerted efforts of central banks and institutional investors are reshaping the gold market landscape, driving prices to unprecedented levels. As these entities continue to accumulate gold, the metal’s status as a safe-haven asset is solidifying, attracting further interest from both institutional and retail investors.
For investors, monitoring central bank activities and institutional investment trends will be crucial in navigating the evolving gold market dynamics.