Central Bank Gold Buying and Why It Matters

You may have read that "central banks are buying gold." This page explains what that means, why those banks say they do it, and what it does and does not tell someone who owns, or is thinking about, a Gold IRA. It is part of our guide to Gold and Precious Metals Basics for IRA Investors. It is general education. It gives no advice and no price forecast.

What is a central bank, and why does it hold gold?

A central bank is a country's (or currency area's) official monetary authority, such as the Federal Reserve in the United States or the European Central Bank. Governments and central banks keep reserves: assets they can use in a crisis or to support a currency. Gold is one such reserve asset. Others include foreign currencies and government bonds.

We looked at three kinds of sources. Official research papers, which describe reasons in the authors' words. Survey results, where central banks answered questions about their own motives. And data from the World Gold Council. The World Gold Council is an industry body for the gold sector, so we treat its numbers and views as its own and label them that way.

Why do central banks say they hold gold?

The reasons below are the stated reasons or the researchers' findings, not our conclusions.

A World Gold Council survey (73 responses, conducted February 25 to May 20, 2025) reports that "enhancing returns remained the primary reason" for actively managing gold reserves, and that "risk management leapfrogged tactical trading as the second most selected reason." It also says that "portfolio diversification and inflation hedging are some key themes" (World Gold Council survey page). Since this survey comes from an industry body, other surveys are a useful check.

The European Central Bank (ECB) cites an earlier World Gold Council survey (February to April 2024). In it, the ECB says the top three drivers were a long-term store of value and inflation hedge, performance during times of crisis, and an effective portfolio diversifier. The ECB adds that a separate OMFIF survey (March to May 2024) of 73 central banks found diversification (68%) and hedging geopolitical risk (40%) as the primary purposes, and that about one in four central banks in emerging and developing economies cited concerns about sanctions or anticipated changes in the international monetary system (ECB).

An International Monetary Fund (IMF) working paper says gold "appeals to central bank reserve managers as a safe haven in periods of economic, financial and geopolitical volatility." It also points to financial sanctions imposed by the United States, United Kingdom, European Union and Japan. In its 1980 to 2021 sample, it estimates that sanctions from one of those currency issuers "raises the gold share by around 2 percentage points" (IMF Working Paper 2023/014).

A Federal Reserve discussion paper offers a different reading of purchases. It says gold accumulation is "generally not associated with de-dollarization of international reserves at the country level, except in a few prominent cases," and that purchases are "more consistent with most countries pursuing a modest diversification of international reserves" (Federal Reserve IFDP 1420). It also says the growing use of financial sanctions by the U.S. government appears to have pushed some governments toward gold. Its sample covers 2012 to 2023.

How much gold do central banks hold?

Sources describe this in different ways, and the figures are from different dates, so they are not directly comparable.

The U.S. Treasury publishes a status report on U.S. Treasury-owned gold. The dataset page says the report shows whether gold is held in deep storage or working stock, and that the book value of $42.222 per ounce was set by law in 1973. It says plainly that "the book value is not the market value." The page we opened showed data through September 30, 2024, and we did not confirm the ounce totals, so we give none.

The World Gold Council's country data page states it was last updated with data as of June 30, 2026, drawn from the IMF's International Financial Statistics. It notes that IMF data lag by about two months and that some late reporters' holdings are older. We could not read the country-by-country tonnes from that page, so we do not list them.

Are central banks buying more gold now?

The ECB reports that central bank demand in 2024 was "more than 20% of global demand," compared with about one-tenth on average in the 2010s. The IMF paper says holdings "have risen since the Global Financial Crisis." A Federal Reserve staff note says official investors "have been accumulating gold on net since 2008," and that the pace "likely increased significantly beginning in 2022" (FEDS Notes).

The World Gold Council survey says "a record 43% of respondents" expect their own gold reserves to rise over the next 12 months, and that none expect a decline. That is an expectation of an increase. It is not a count of firm purchase plans, and it is one industry body's survey of banks that chose to respond.

The ECB also reports that the buying is concentrated. It says Türkiye, India and China together accumulated more than 600 tonnes since the end of 2021, and that more than half of the increase in official gold reserves since 2014 was accumulated by Russia's central bank. These figures are the ECB's, with data through the end of 2024.

Does central bank buying move the price of gold?

Be careful here. Nothing we found says central bank purchases will lift prices in the future.

The Federal Reserve staff note says the higher reserve value of gold was "primarily driven by a surge in gold prices from a jump in private sector demand," and that the price surge "does not reflect a concurrent spike in central bank purchases." The ECB notes that central bank gold reserves are close to Bretton Woods-era levels (the post-World War II system of fixed exchange rates). Our page on what drives gold prices covers interest rates, the dollar, inflation and demand, and where each explanation breaks down. For the wider picture of buyers and sellers, see gold supply and demand.

Does central bank gold matter for a Gold IRA holder?

Mostly as context. A few differences are worth stating plainly.

• Different goals. A central bank manages a country's reserves, with currency, sanctions and geopolitical concerns that an individual does not face. A retiree has taxes, required withdrawals and a finite timeline.
• Different rules. A Gold IRA is limited by IRS rules. The IRS says an IRA may hold gold bullion "of a certain fineness" if "a bank or approved non-bank trustee keeps physical possession of it." A purchase of a collectible "is treated as an immediate distribution from such account in an amount equal to the cost to the plan of such collectible" (IRS).
• Different costs. Central banks are not retail buyers and do not face a retail dealer spread. A retail IRA has dealer, custodian and storage costs.
• No signal for timing. A bank's reasons for holding gold do not tell you whether it is a good time for you to buy or sell. A central bank's decision to buy or not is not advice for anyone else.

If you want to know how central-bank-type reasons such as diversification apply to your own savings, a qualified, independent financial or tax professional can help. This page cannot.

What mistakes do people make with this topic?

• Reading "central banks are buying" as a promise that prices will rise. The sources do not say that.
• Treating a survey from an industry group as neutral. Check who paid for it.
• Mixing up dates. Figures from end-2021, 2024 and mid-2026 describe different moments.
• Mixing up tonnes and ounces. Gold is quoted in troy ounces in the U.S., while central bank data are usually in tonnes.
• Assuming a bank's reasons are the same as a household's reasons.

Related questions

Why are central banks buying gold now?

The stated reasons in the sources above are diversification, performance in crises, inflation protection, hedging geopolitical risk and, for some, concern about sanctions. Researchers disagree about how much each matters. The Federal Reserve paper reads recent buying as modest diversification, not a wholesale move away from the dollar, while the ECB links some buying to geopolitical factors.

Does the U.S. still hold gold?

Yes. The Federal Reserve staff note names the U.S. as the largest holder of gold reserves, and the Treasury publishes a report on its holdings. Treasury's page values the gold at a legal book value that is not its market value.

Is gold the main reserve asset?

Not in the sources we opened. The ECB says gold was second after the U.S. dollar in 2024 at market prices. The Federal Reserve note says world gold reserves were $5.1 trillion at end-2025, above foreign official holdings of U.S. Treasury securities of $3.9 trillion, but that Treasuries again surpassed world gold reserves excluding the U.S. by June 2026. The comparison depends on whether U.S.-held gold is counted.