Central banks bought 41 tonnes of gold in May despite steep price slide

Central banks worldwide are maintaining their appetite for gold despite the metal's steepest quarterly decline since 2013, with two major surveys confirming that official-sector demand remains a structural pillar of the market even as prices have fallen more than 25% from January's record high.

Record Share of Central Banks Plan to Add Gold

The World Gold Council's 2026 Central Bank Gold Reserves Survey, released June 16, found that a record 45% of reserve managers plan to increase their institutions' gold holdings over the next 12 months, up two percentage points from the prior year. Nearly 89% of respondents expect total global central bank gold reserves to keep rising. Separately, the OMFIF Global Public Investor report, published the same week, found that 82% of central banks now hold physical gold, up from 71% a year earlier, and a net 30% intend to raise their allocations over the next one to two years.kitco+4

The buying has continued through the correction. World Gold Council data published this week showed central banks purchased a net 41 tonnes of gold in May, led by Poland's 18 tonnes and China's 10 tonnes — Beijing's 20th consecutive monthly addition. Over the past four years, central banks have averaged 1,000 tonnes of annual purchases, double the rate of the preceding decade.advantagegold+3

A 'De-Bubbling,' Not a Bear Market

Gold peaked near $5,595 on January 29 before a historic single-day crash on January 30 — triggered partly by the nomination of Kevin Warsh as the next Federal Reserve chair — wiped 9% off the price in a session. Prices continued to slide through the spring, falling roughly 16% in the second quarter alone and closing June near $3,942, a four-month losing streak.goldenarkreserve+2

WisdomTree's ↗ 2.44% Nitesh Shah, head of commodities and macroeconomic research, has described the drawdown as a healthy normalization rather than a fundamental shift. Shah argues gold is "in the process of transitioning towards a new, higher, steady state, driven by a broadening investor base" and that speculative froth has been flushed out, creating space for long-term strategic buyers. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.14% in June lowered its year-end 2026 target from $5,400 to $4,900 per ounce, citing the Federal Reserve's decision to hold rates steady, but maintained a bullish longer-term stance anchored in persistent central bank demand.reuters+3

Structural Logic Remains Intact

The surveys highlight a deepening shift in reserve management philosophy. The WGC found that 51% of central banks now cite geopolitical risk protection as a reason for buying gold, up 11 percentage points from 2024. Gold recently surpassed U.S. Treasuries to become the world's largest reserve asset class. CNN reported that for the first time since OMFIF began tracking investment intentions, more central banks plan to reduce dollar holdings than increase them over the next decade.cnn+1

For institutions, the message is consistent: the correction is technical, and the structural case — sanctions risk, de-dollarization, and the absence of default risk — endures.