Renewed central-bank buying tightens supply and creates steady price support. Official flow data and ETF holdings reveal the market direction.
Central banks have returned to steady gold purchases, and those buys now sit alongside strong ETF demand. This combination reduces available bullion and lifts prices, creating a different market than recent years.
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Why Central Banks Have Returned To Buying
Many reserve managers have added gold this year to diversify holdings and increase reserve liquidity. Official reports show a rebound in central-bank buying, with a notable 15 tonnes of purchases recorded in August.
Analysts expect high annual totals for 2025, with institutional Gold price forecasts in the hundreds of tonnes, reflecting ongoing reserve accumulation.
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How Official Buying Changes Market Structure
Official purchases remove metal that would otherwise flow to traders or industry, tightening the physical market. Total global quarterly demand, including investment, reached 1,249 tonnes in Q2, a 3% increase year on year, showing how strong investment has become.
At the same time, ETFs added large amounts of metal, with 397.1 tonnes entering funds in the first half of the year, raising total ETF holdings and making paper and physical demand overlap more closely.
That overlap reduces slack in the market and can amplify price moves when flows accelerate.
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What Investors Should Watch
Track three items each month:
- Official flows
- ETF holdings
- Price behavior around key levels.
Official flow reports will show whether central banks keep buying each month. Gold ETF holdings and weekly flows will show whether investors continue to layer on to official demand.
Finally, watch price behavior around the $3,900 to $4,000 band, because sustained closes above that range would signal that structural demand has taken control.
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Conclusion
Central-bank Gold purchases have moved from an occasional factor to a steady source of demand. Follow monthly official flow data and ETF metrics to understand whether the market will stay tight and prices can hold higher levels.
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