Central Banks Rush to Buy Gold Again, Including China

Central banks around the world remain keen on purchasing gold amid the fluctuating prices of the precious metal. The market is holding positions in safe-haven assets while awaiting clarity on the direction of the Middle East conflict and US interest rate policies. As of today, Monday (11/5/2026) at 12:50 WIB, the gold price stands at US$4,659.55 per troy ounce, down 1.13%. This contrasts with the end of last week, when gold closed at US$4,714.42 per troy ounce on Friday (8/5/2026), up 0.62%. That closing price was the highest since 22 April 2026, over two weeks ago. Over the week, gold rose 2.18%, ending a two-week downward trend. Gold prices had previously plummeted due to high oil prices, which raised fears of inflation and made it difficult for the US Federal Reserve to cut interest rates. However, the decline in gold prices was somewhat cushioned by sustained high demand from central banks. A World Gold Council (WGC) report shows that total global gold demand in Q1-2026 reached 1,231 tonnes, up 2% from the same period last year. In value terms, the surge was much larger, with global gold demand value jumping 74% to US$193 billion, the highest in history. The largest demand came from gold bars and coins, with volume at 474 tonnes, up 42% year-on-year. Asian investors were the main drivers, aggressively entering gold-based investment products amid rising global market volatility. Gold ETF demand also continued to grow. In Q1-2026, gold ETF purchases increased by 62 tonnes. This figure is lower than Q1-2025’s 230 tonnes, due to significant outflows from US-based ETFs in March. On the other hand, surging prices pressured gold jewellery consumption. Jewellery demand volume fell 23% compared to last year, though spending value rose 31%. This indicates consumers are still buying gold despite the high prices. Demand from the technology sector also increased. Gold usage in the technology industry rose 1% to 82 tonnes. The increase was largely supported by the expansion of artificial intelligence (AI) infrastructure, which boosts the need for gold-based electronic components. Central banks worldwide remain active in adding to their precious metal reserves. In Q1-2026, net central bank purchases reached 244 tonnes, up 3% from last year, although sales activity is also rising in some countries. China has been one of the most consistent countries in adding to its gold reserves this year. As of March 2026, China’s gold reserves stood at 2,313.5 tonnes, or about 9.1% of its total foreign exchange reserves. This positions China as the world’s sixth-largest gold holder, approaching Russia with 2,304.7 tonnes. The United States remains the largest global gold holder with reserves of 8,133.5 tonnes. Its share even reaches 83.3% of the country’s total foreign exchange reserves. Germany is in second place with 3,350.3 tonnes, followed by the IMF at 2,814 tonnes, Italy at 2,451.8 tonnes, and France at 2,437 tonnes. In terms of recent purchases, Poland has been the most aggressive in adding to its central bank gold in 2026. Up to February, the country bought 11.2 tonnes of gold. Uzbekistan followed with 8.7 tonnes and Kazakhstan with 6 tonnes. China purchased 5 tonnes in the same period. Guatemala added 2.5 tonnes, while the Czech Republic bought 1.7 tonnes. India, Singapore, Egypt, Serbia, and Kyrgyzstan also recorded additions to their gold reserves, albeit in smaller amounts.