Central Banks Are Still Buying Gold — Even as the Pace Has Slowed
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Central banks have been loading up on gold since 2020, and for many, the buying sprees are a result of governments’ economic stimulus plans during the pandemic, which caused record-breaking inflation in subsequent years.
Still, with inflation having returned to historical norms in most countries, central banks have continued to accumulate gold even as inflation has subsided, monetary policies have been adjusted and interest rates have gotten lower.
So should investors follow the lead of these institutions and go on their own gold-buying sprees? This analysis will reveal why central banks are buying so much gold, the benefits of buying gold right now, and what to consider before accumulating the precious metal.
Revisiting the gold standard
It’s not new for central banks to hoard gold. In fact, the gold standard directly tied the U.S. dollar to gold for decades. Great Britain suspended the gold standard in 1931, and the U.S. ended domestic gold convertibility in 1933 (and later ended international dollar-to-gold convertibility in 1971).
Inflation was still present and quite volatile during the period when the gold standard was in practice, but it averaged out in the end. Between 1880 and 1914, inflation only averaged 0.1%. That period coincided with America’s “classical gold standard,” but the country had mid-single-digit inflation and deflation rates in some of those years.
However, inflation has grown at a faster pace since the U.S. moved away from the gold standard. This has been reflective of historical trends, with multiple countries and empires throughout history experiencing soaring inflation after debasing their currency from gold and relying on fiat currency instead.
It’s important to remember the gold standard when looking at the current gold-buying spree that’s taking place. Central banks can create more currency, decreasing the value of their paper currency in the process. Since gold has intrinsic value, its price will increase relative to the currencies that central banks continue to flood into the monetary system.
How much gold are the central banks buying?
Central banks bought a record 1,082 metric tons of gold in 2022 and accumulated 1,037 metric tons of gold in 2023. Central banks then added 1,045 metric tons of gold to global reserves in 2024, and net purchases cooled to 863 metric tons in 2025. Even so, 2025 buying remained well above the 2010–2021 annual average.
Central banks accumulated 299.94 metric tons of gold in the first quarter of 2024, setting a record for Q1 gold purchases. An additional 183.39 metric tons of gold arrived in the second quarter, representing the highest Q2 total since 2021.
In the third quarter of 2024, central banks bought 186.2 metric tons of gold, which represents a steep year-over-year decline from Q3 2023 gold purchases. However, the physical asset’s demand has more than doubled year-over-year, according to the World Gold Council.
Why are central banks buying gold?
Central banks regularly accumulated gold before the pandemic, but the ramp-up in recent years has been noteworthy. There are some reasons why these institutions have been stockpiling precious metals, including those listed below.
Rising inflation
Fiat currencies lose value as governments print more money. While inflation has been the norm, the U.S. printed more than $3 trillion in 2020, with other countries also putting their money printers to work.
Higher inflation reduces the purchasing power of fiat currencies. Consumers saw that firsthand as the cost of everything increased in 2022. According to the U.S. Labor Department, the annual inflation rate hit 7% in 2021 and 6.5% in 2022.
Falling interest rates and tariffs could fuel inflation
The rate of inflation has subsided since its peak of 9.1% in June 2022. The latest Consumer Price Index reading (for January 2026) showed prices up 2.4% over the past year. However, inflation can inch higher as the Federal Reserve eases policy over time; the Fed held the target range for the federal funds rate at 3-1/2 to 3-3/4 percent at its January 2026 meeting.
Lower interest rates encourage more consumers and businesses to borrow capital. Loans and lines of credit increase the circulation of money, which leads to more inflation.
While we’re not likely to see inflation challenge the highs set in 2022, inflation could rise as interest rates continue to fall. Additionally, President Trump’s 2025 tariff increases are expected to increase inflation in the short run, which could lead to higher gold prices.
Any potential federal income tax cuts may be able to compensate for the extra costs associated with tariffs, but reductions in federal income taxes would also increase inflation by putting more money into the economy.
Global uncertainty
Global conflicts have increased uncertainty, which makes gold a more desirable asset. Many investors retreat to gold during hard economic times, and central banks may be trying to get a headstart.
The ongoing conflicts between Israel and Hamas as well as Ukraine and Russia have already contributed to increases in gold prices over the past few years.
Should you buy gold like the central banks?
Central banks have been buying gold for many years in an effort to diversify their holdings. The recent and sudden uptick in gold purchases has brought more attention to the precious metal. Gold’s strength has continued into 2025 and early 2026, supported by shifting rate expectations and global uncertainty.
However, inflation is dropping and is back to historical averages. Lower interest rates will likely increase inflation, but it’s unlikely that inflation will reach the highs of 2022 anytime soon. Even with inflation peaking that year, gold remained a valuable asset, demonstrating its role as a store of value.
The physical asset’s intrinsic value remains intact even as central banks continue to print money. Gold is an essential resource, not just as a medium of exchange but in numerous commercial applications, including dentistry, jewelry, electronics, automobiles and other high-demand products and services.
Gold will continue to gain value as the money supply grows. The precious metal is time-tested and has retained its value for thousands of years. However, investors should assess their risk tolerance and objectives before accumulating gold.