Why Are Central Banks Buying So Much Gold? 90% Institutions Cite This Reason

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Central banks are increasingly turning to gold as protection against financial crises, inflation and geopolitical risks, according to a World Gold Council survey highlighted Tuesday by market commentator, The Kobeissi Letter.

Crisis Protection Drives Gold Demand

According to the survey of 69 central banks, 90% of respondents cited gold’s performance during periods of crisis as a primary reason for holding on to the precious metal.

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The trend was even stronger among emerging market and developing economy central banks, where 92% identified crisis performance as a primary driver, compared with 81% of advanced economy central banks, The Kobeissi Letter said in a post on X.

Why are central banks buying so much gold?

A record 90% of central banks cited gold’s performance during times of crisis as a key factor in their decision to hold gold, according to the World Gold Council survey of 69 central banks.

This trend is more frequently seen in… pic.twitter.com/wxm71EcT3h

— The Kobeissi Letter (@KobeissiLetter) June 30, 2026

Inflation Hedge, Diversification Remain Key

Beyond crisis protection, 84% of respondents cited gold’s role as a long-term store of value and hedge against inflation.

The survey also found that 85% of emerging market central banks viewed gold as a hedge against geopolitical risks, compared with 56% of advanced economy central banks.

Central Banks Continue To Accumulate Gold

Central banks have remained among the largest buyers of gold in recent years, helping support prices as countries diversify reserves amid geopolitical and economic uncertainty.

A separate World Gold Council survey published on June 16 found that central banks bought an average of 1,000 metric tons of gold annually over the past four years, double the previous decade’s pace, with 89% expecting global reserves to rise over the next 12 months.

Gold’s Next Big Catalyst

While analysts expect rising real interest rates to become the dominant driver of gold’s near-term performance, economist Mohamed El-Erian last week said renewed, consistent central bank buying could provide the next major catalyst for the precious metal.