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Central banks began 2025 with a significant slowdown in gold purchases, marking a stark contrast to the robust buying activity seen in 2024. According to the World Gold Council, central bank gold purchases in January totaled 18.5 tonnes, a 60% decline year-on-year. The downturn also reflects a shrinking number of participating buyers, with only 11 central banks reporting purchases—the lowest monthly count since January 2021.
This slowdown comes after central banks accumulated record amounts of gold throughout 2022-2024, driven by a desire to diversify away from the U.S. dollar, hedge against inflation, and bolster economic stability amid geopolitical uncertainties. However, the sharp decline in January suggests that some central banks may be reassessing their aggressive gold accumulation strategies.
Central bank buying in January continued but was at lower levels as buying scaled-back amid higher Gold prices
The January 2025 central bank gold transactions show a clear divergence between buyers and sellers. Uzbekistan (8 tonnes), China (5 tonnes), and Kazakhstan (4 tonnes) were the largest buyers, reinforcing emerging markets’ commitment to gold reserves. Poland and India (3 tonnes each) continued their moderate accumulation, while smaller increases came from Czech Rep. (2 tonnes) and Qatar (1 tonne)
On the selling side, Kyrgyzstan (-3 tonnes), Jordan (-2 tonnes), and Russia (-3 tonnes) reduced their reserves, possibly for liquidity needs. Overall, despite some selling, central banks remained net buyers, though at a slower pace than in 2024, suggesting a cautious approach amid high gold prices. The Phillipines has been a seller in recent months, quoting the gains in the Gold price as a reason for the sales
Despite the overall slowdown, emerging market central banks remained the primary drivers of gold accumulation. The top three buyers in January were:
The Central Bank of Uzbekistan led the pack with 8 tonnes of net purchases, increasing its gold reserves to 391 tonnes, which now account for 82% of its total reserves. Uzbekistan has historically been a net seller at times, but its recent gold accumulation suggests a renewed commitment to gold as a long-term store of value.
The People’s Bank of China (PBoC) continued its 14th consecutive month of buying, adding 5 tonnes to bring its total holdings to 2,285 tonnes, or 6% of total reserves. China’s ongoing gold purchases are widely seen as part of a broader effort to reduce reliance on the U.S. dollar and strengthen financial independence. We uncovere evidence that China’s Gold buying is higher than declared
The National Bank of Kazakhstan (NBK) increased its reserves by 4 tonnes, bringing total gold holdings to 288 tonnes (55% of total reserves). Notably, NBK Chairman Timur Suleimenov indicated that the central bank is considering transitioning to “monetary neutrality in gold purchases” to strengthen international reserves and shield the economy from external shocks.
Central banks became net buyers of gold in 2010, marking a significant shift from decades of net selling. This transition was driven by a desire to diversify foreign reserves, reduce reliance on the U.S. dollar, and hedge against economic uncertainty.
Before 2010, central banks, particularly in Europe, were net sellers due to agreements like the Washington Agreement on Gold (1999), which aimed to regulate official gold sales. However, following the 2008 financial crisis, emerging market economies—such as China, Russia, India, and Turkey—began accumulating gold aggressively, leading to a sustained period of net buying that continues today.
Poland, which was the dominant central bank buyer in 2024 with 89 tonnes added to reserves, significantly slowed its pace, purchasing just 3.1 tonnes in January—less than half its monthly average for 2024.
Poland’s gold accumulation strategy is linked to its goal of increasing gold reserves to 20% of total currency reserves. Based on current reserves and gold prices, Poland would need to purchase fewer than 50 tonnes to reach its target, making further large-scale acquisitions increasingly unlikely.
The slowdown is likely due to Poland approaching the upper limit of its planned accumulation causing them to shift from rapid purchases to a more measured strategy.
Russia’s central bank sold 3 tonnes amid ongoing economic pressure from sanctions and ongoing conflict with Ukraine. Efforts to manage liquidity was also likely a factor
Central Bank of Jordan also sold 3 tonnes, possibly to meet domestic financial obligations. Whilst the National Bank of the Kyrgyz Republic reduced its holdings by 2 tonnes
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