July 2026 - Week 4 Edition
Central Bank Gold Buying Picks Up in May – Especially in China and Poland
After a hot first quarter of 244 metric tons of central bank gold buying, that pace tapered off sharply in April, then resumed in May, according to the World Gold Council (WGC) and the London Gold Exchange. The full second-quarter accounting (including June) is not yet available but gold buying dipped to 19 metric tons in April and then jumped to 41 tons in May, making 304 tons in the first five months of 2026. The WGC now projects 700 to 900 tons for the full year, roughly equivalent to 2025 purchases.
The escalation of the conflict in Iran led some central banks to sell gold to raise cash. The Wall Street Journal reported on July 22 that Turkey sold about 81 tons of gold in the first half of 2026 and Russia has sold 34 tons to fund its ongoing war with Ukraine, but all the total figures for central bank gold buying represent net purchases – buying minus selling. On the opposite side of the spectrum from Turkey’s selling, Poland is a standout consistent gold buyer – its gold reserves have reached 614 tons, on the way to a goal of 700 tons. Poland bought 18 tons of gold in May, its fourth straight month of double-digit purchases.
China also bought 10 tons of gold in May, running its gold-buying streak to 20 straight months, with lots of room for growth, since gold is only 8.3% of China’s foreign exchange hoard, leaving room for growth.
Also, the WGC’s annual survey of central banks in 2026 revealed nearly half (a record 45%) of all central banks plan to add more gold over the next year and – even more shocking – nearly three of four (74%) central banks expect to sell U.S. dollars in the coming year. An astonishing 89% of central banks polled by WCG expect gold prices to rise in the next year! The U.S. dollar’s share of all global foreign exchange reserves has fallen from 72% in 2000 to approximately 58% in 2025, while gold’s share of central bank reserves has risen to 24%, eclipsing U.S. Treasury bonds (23%). This is important because it represents a new (unofficial) gold standard, with central banks exchanging trillions of dollars for gold.
Total central bank gold buying – averaging over 900 tons a year since 2022 – is a main engine of gold’s doubling since 2023. To put 900 tons in perspective, all of the world’s gold mines produce about 3,600 tons of gold per year. If central bank buying averages 900 tons a year, that is one-fourth of each year’s new mine supply on top of established demand for gold jewelry (about 2,000 tons), investment demand (1,180 tons) and industrial demand (325 tons). Put these numbers together and you’re talking 4,400 tons per year vs. 3600 tons from mines – a net shortage of about 800 tons. The difference is made up from recycled gold. This reveals how vital central bank gold remains for the overall supply/demand balance, pushing gold prices up each year.
Will Gold Ever Go Below $4,000 Again?
In the past few months, gold has been quietly building a new floor under its global price chart – at $4,000 per ounce. Each time gold dips below $4,000, it rises back above that level within a day or two. In fact, gold hasn’t closed any single trading day below $4,000 for more than ONE trading day in a row in 2026.
The latest example was this past week. Gold closed at $3,985 on Thursday, July 16. Then it dipped to an intra-day low of $3,964 on Friday, before closing at $4,012 on Friday. This week (July 20-24), gold rose from barely $4,000 on Monday, July 20 to reach $4,170 mid-week, a gain of 5+% since this past Thursday’s low.
The pundits always have a “reason” for daily (or hourly) gold moves – ignoring what seems to us to be the major motivation – as savvy investors “buy the dips” and each dip below $4,000 has proven to be temporary. After gold’s move this week, pundits pointed to “short covering and renewed haven demand,” and those causes are real but they are not new. We have seen plenty of instances of both factors since the start of the hostilities in Iran (on February 28), when gold was trading well above $5,200 per ounce.
While many Western Hemisphere gold buyers (primarily through ETFs) have sold or shorted gold, Asian investors are continuing to stockpile gold. The commodity analysts at Schroeders wrote in their monthly survey for June, “Primarily eastern emerging market central banks have leaned into lower gold prices to buy aggressively for secular reasons. Western investors meanwhile have been liquidating.”
Poland has also been buying a lot of gold, as they have huge eastern borders with both Ukraine and Belarus (a proxy for Russia), so they are at the “front lines” of that war and have accepted about 1.5 million Ukrainian refugees since that war began 4 1/2 years ago. Analysts at Schroder believe the National Bank of Poland is likely to reach its 700-ton gold target this year and keep buying after that.
Schroder’s analysts also expect the People’s Bank of China (PBOC) to remain the most important sovereign central bank gold buying source, long-term, due to its huge foreign exchange hoard ($3.34 trillion), with under 9% of that currently denominated in gold.
“At $4,200/oz, current gold reserves as a % of total reserves would be 8.3%,” they said. “To get to 30%, all else equal, we would need to see June’s 15-ton purchase volumes repeated monthly for the next 33 years.”
Long-term, China wants to unload its dollars for gold. China is also very secretive about its actions, as Schroder writes, citing China’s many previous revisions: “Most of the individual monthly purchases are dwarfed by the statistical catchups reported in 2003, 2009 and 2015 where the PBOC decided to announce previously undisclosed buying in one go.”
Outside of their official gold purchases, China imported more gold in May this year than any other month in the past two years, so they still believe in the future of gold. In May, China imported 162.6 metric tons of gold, about 63% above the comparable 99.5 tons in May 2025. So far this year, in the first five months, all the non-monetary (non-central bank) gold imports to China reached an astonishing 691.6 metric tons, up 76% from the 393.6 tons they imported in the same five months of 2025. This demand was mostly for physical bars and gold accumulation plans where retail investors buy a fixed amount of gold each month.
This Asian demand and central bank buying will help place a firm $4,000 floor under gold with a long-term engine to push gold above $5,000 again, perhaps by the end of this year … on its way to $10,000 gold. As we have long said, “buy on dips,” a great winning strategy for long-term gold investors.
Gold is up about 4% since its Thursday (July 16) low, setting up a new floor at $4,000. Silver is up almost 9% but it is having a harder time than gold in establishing a new floor at $60 per ounce but we have seen the same pattern in the last few trading days. Silver closed at $55.90 on Thursday, July 16, dipping to $55.01 early Friday before returning to nearly $60 ($59.95) late Wednesday, July 22. Silver, being more volatile than gold in history, leaped to $61.70 intraday Wednesday, for a 12% six-day gain but it fell slightly on Thursday morning to $58.32, further proving its short-term unpredictability.
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