Central Banks Bought A Record 289 Tonnes Of Gold As Prices Crashed

Central banks bought 289 tonnes of gold in the second quarter of 2026, a record for the period, while investors were still reacting to a sharp fall from gold's January high.

Retail traders saw the gold sell-off and treated it like a warning. Central banks saw the same move and kept buying. According to the World Gold Council's Q2 2026 Gold Demand Trends report, central banks and other official institutions added 288.9 tonnes in the quarter, up 62% from a year earlier. The same report put the average LBMA afternoon gold price at $4,506.29 an ounce, 8% below the first quarter's record level but still 37% higher than the same quarter in 2025.

That is the story. Not panic. Allocation.

If you're only watching the daily gold chart, you're missing what the people who manage national reserves are doing with it. The World Gold Council's 2026 Central Bank Gold Reserves Survey, published in June after polling 76 central banks between February 5 and May 19, found that 74% expect the dollar's share of global reserves to fall over the next five years. Nearly half, 45%, expect their own gold reserves to rise over the next 12 months. That isn't a fringe view among gold bugs. It's the stated expectation of the institutions that hold the world's reserve assets.

Poland and China did the heavy lifting

Look at Poland. The National Bank of Poland was the largest reported buyer in the second quarter, adding 51 tonnes and taking its holdings to 632 tonnes by the end of June, according to the World Gold Council data reported by The National. This followed 31 tonnes of buying in the first quarter. Poland's governor, Adam Glapinski, has publicly said the bank wants about 700 tonnes of gold. The target is real. The buying is real too.

China was next. The People's Bank of China added 33 tonnes in the quarter, its largest quarterly addition since the fourth quarter of 2023, lifting reported holdings to 2,346 tonnes. The World Gold Council's China-focused Q2 review said the PBOC has now increased its gold holdings for seven consecutive quarters. You don't build that position to trade a bad June. You build it because reserve policy has moved.

There were other buyers, but the point doesn't need a long roll call. Uzbekistan, Kazakhstan, Jordan and the Czech Republic also added gold in the quarter. The signal comes from the pattern, not from turning every central bank into a line item.

The dollar is the quiet subject

Gold's price gets the attention because it moves on screens. The dollar is the quieter issue underneath this report. In the World Gold Council survey, 89% of respondents said they expect global central bank gold reserves to increase over the next 12 months, while 83% said gold will account for a higher share of total reserves in five years. At the same time, nearly three-quarters expect the dollar's share to be lower.

That's a blunt message. Central banks aren't saying the dollar disappears. They are saying they want less of their future tied to it. Gold is useful to them for the exact reason it frustrates investors who want yield: it doesn't belong to another country's central bank, finance ministry, or payment system.

There is a rough edge in the data, and it matters. First-half central bank buying came to about 345 tonnes after a sharply revised first quarter, the weakest first half in four years. Turkey, Russia and Azerbaijan were among the sellers earlier in the year, according to World Gold Council reporting on official-sector flows. De-dollarization isn't a parade where every country marches in the same direction at the same speed. Some central banks sell because they need liquidity. Some buy because they are rearranging reserves for the next decade.

Both can be true.

Gold has since recovered much of the spring and early-summer damage. The Wall Street Journal reported this week that Comex gold futures were trading around $4,383 an ounce on August 11, helped by renewed investor demand and expectations around Federal Reserve policy. That rebound proves nothing about timing. What it shows is more useful: central banks didn't need to call the bottom to keep buying through it.

For ordinary investors, the warning is simple. Central banks bought 289 tonnes in a quarter when the market was still digesting a painful fall from record highs. That's not panic buying. They also told surveyors, plainly, that they expect more gold and less dollar weight in the reserve system ahead. Don't confuse price volatility with a collapse in institutional demand. If you're treating gold as only a chart trade, you're watching the loudest part of the story and missing the part with the longest memory.

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