As we enter the second quarter of 2025, central banks, the world’s “smartest money,” are continuing to hoard gold at a record pace—a trend that began in 2022.
According to the World Gold Council, central banks collectively purchased 1,045 metric tons of gold in 2024 alone.
That marks the third year in a row that their gold buying has exceeded the 1,000-ton mark, more than doubling 2021’s 450 tons.
Central banks’ insatiable appetite for gold reached a significant milestone in 2024.”
– World Gold Council
“Central banks’ insatiable appetite for gold reached a significant milestone in 2024.”
– World Gold Council
What’s perhaps even more telling is who is purchasing.
While countries like China, Russia, and the US have long been accumulating gold, they’re no longer alone. In 2024, an incredible 80% of net gold purchases came from central banks in emerging markets.
From Southeast Asia to Eastern Europe to South America, an expanding list of central banks who were previously minor players in the gold market are now making aggressive moves to increase their gold reserves.
📌 Top Buyer of 2024:
The National Bank of Poland was the single largest purchaser in 2024, adding 90 metric tons to its reserves.
Why are central banks buying so much gold?
For decades, gold played a quiet role in central bank strategies as it served as a backstop, a stabilizer—a tool for diversifying their reserves.
And now, amid concerns over the strength of the US dollar, tariffs, and rising geopolitical tensions, analysts believe the increased gold buying may also be part of a global trend toward de-dollarization.
As Yahoo Finance reports, it’s all about “countries trying to diversify reserves away from the dollar, as well as attempts by some nations to de-dollarize trade relationships by conducting transactions in [their] local currencies.”
These international de-dollarization efforts increased after the US froze billions of dollars in Russia’s foreign reserves in March 2022 following the invasion of Ukraine.
That single move sent a message to every other nation:
Their dollar holdings could be taken away overnight if they fell out of favor with Washington.
In response to US sanctions, Russia boosted its gold holdings. And spooked central banks across the globe have been repatriating their gold and shifting away from reliance on the greenback.
Central banks are also turning to goldl because…
Gold is a hedge against the US Federal Reserve
Over the last decade, the Federal Reserve mostly kept interest rates near zero and pumped trillions of dollars into the economy. That torrent of printed money ignited the highest inflation the US has seen since the early 1980s. And it exposed just how quickly the dollar’s purchasing power can deteriorate.
So, avoiding holding an asset that the Federal Reserve can inflate to worthlessness is what the central banks are worried about. The good news for individual gold investors and central banks alike is that:
Gold cannot be created by the will of a bureaucrat like a currency. Only so much gold exists or will ever exist. And extracting it from the earth is a slow, complicated, expensive process.
As a result, gold’s supply is always finite, and it cannot be inflated leading its value to go to zero.
This “intrinsic” value, coupled with the basic dynamics of supply and demand, has helped gold hold its value historically. It also helped gold become the asset that tells us when “the Emperor has no clothes.”
The tendency of gold’s price to rise as the value of the dollar falls shows us where the economy is headed, which makes gold an excellent hedge against the inflation caused by the Fed.
And that is wise to consider right now because inflation is expected to rise again:
“We now see higher inflation in 2025 with a more pronounced and sooner re-acceleration in goods prices,” Morgan Stanley Research analysts shared with CBS News.
Now, add the ever-ballooning nation debt and the costs of servicing the trillion-dollar-per-year interest on that debt, and it’s easy to see how the US is in a challenging spot financially.
Deficit spending will likely continue…
Troubles for the US dollar will grow…
Central banks, with their fingers on the pulse of the world’s economic heartbeat, are aware of these growing financial stresses… and they are taking action by buying gold… now.
What does all this mean for everyday Americans?
Just look at the price of gold and you’ll see the whole story.
Gold hit 40 all-time highs in 2024 and has reached a new historic high of $3,170/oz in 2025. And analysts at Goldman Sachs, JP Morgan, and Bank of America are all forecasting even higher levels in 2025, driven in large part by the unrelenting demand from central banks.
So, if you want to protect your wealth and buying power against dollar devaluation, inflation, and global uncertainty, once you own gold, you have accomplished your mission.
This isn’t about timing a perfect entry.
It’s about understanding where the real capital is moving and making sure you’re not the last to act.
Please don’t hesitate to reach out to us with any questions you may have.
May you be safe and well during these uncertain times.
Todd Sawyer, Director of Client Education
Colonial Metals Group