Gold: Central Banks Are Rewriting the Price Floor
Gold trades at $5,007 per ounce, and the most important buyers in the market don't care what the price is. Central banks purchased 863 tonnes of gold in 2025 — the third consecutive year above 800 tonnes — and another 755 tonnes are projected for 2026. This isn't speculative demand. It's sovereign balance sheet restructuring — [a trend explored in our central bank explainer](/posts/2026-02-22/deep-dive-how-central-banks-control-the-money-supply-from-interest-rates-to-quantitative-easing) — on a scale not seen since the 1960s. The consensus narrative frames gold's move above $5,000 as a safe-haven trade driven by geopolitical fear. That misses what's actually happening. Price-insensitive sovereign buyers now represent a permanent "base load" of demand that has structurally shifted gold's equilibrium price higher. Even January 2026's modest 5 tonnes of net central bank purchases — far below the 27-tonne monthly average of 2025 — came alongside a broadening demand base, with Malaysia buying gold for the first time since 2018 and South Korea announcing plans to add gold ETFs to reserves for the first time since 2013. Investors treating $5,000 as a ceiling should consider that central banks are treating it as a floor.