Why are central banks buying more gold now?

Watching reserve managers, they’ve shifted to gold because FX reserves sag, inflation expectations rise, and it’s a proven counterweight to dollar depreciation.

When I last sat with a colleague running reserves for a mid-sized central bank, they stressed the same reasons pushing others toward gold. Sanctions on some dollarized economies, tighter capital flows, and jittery markets made them revisit gold’s role. They already had enough dollars and euros, but the mix was heavier on paper assets, treasuries, swaps, that feel less reliable when rates zigzag. A chunk of their next quarter’s purchases came from operational income, and they deliberately routed it to bullion for stability, not quick returns. They weren’t chasing a spike; it was about building shock absorbers. The gold in vaults isn’t earning much, but it doesn’t rely on trust in a specific currency or counterparty. In volatile markets, knowing you’ve got an asset that central banks worldwide agree on is oddly comforting, and that’s why the trend keeps growing.