Institution: This year, global central bank gold purchases may reach 1,000 tons, and the price increase has not affected the enthusiasm for gold purchases

Under the repeated policies of Trump, tense geopolitical situations, and economic uncertainty, global central banks are set to purchase gold on a large scale for the fourth consecutive year, with purchases expected to reach 1,000 tons in 2025.

On Thursday, according to the latest annual report from consulting firm Metals Focus, global central banks are expected to purchase 1,000 tons of gold in 2025, a slight decrease of 8% from the record 1,086 tons in 2024, but this will mark the fourth consecutive year of large-scale gold procurement by central banks.

Data on central bank gold purchases in the first quarter of this year shows that despite a significant rise in gold prices (which have increased by 29% this year), the enthusiasm for purchasing by central banks has not diminished, with procurement levels consistent with the quarterly average from 2022 to 2024. In the officially reported purchasing activities, Poland, Azerbaijan, and China are leading, while the stable inflow from the Central Bank of Iran also suggests its continued accumulation of gold.

Metals Focus bluntly pointed out,

The driving factors supporting de-dollarization have remained firmly in place in recent years, with Trump's unpredictable policy stance, public criticism of the Federal Reserve Chairman, and the deteriorating fiscal outlook in the U.S. further undermining market confidence in the dollar and U.S. Treasuries as safe-haven assets. The escalating geopolitical tensions since the Trump administration took office have also weakened the attractiveness of U.S. assets.

Central Banks Become the Third Largest Consumer of Gold

In the global gold consumption structure, central banks have become the third largest consumer group, following the jewelry industry and physical investment, accounting for nearly a quarter of total demand. This position highlights the growing influence of official sectors in the gold market.

Metals Focus stated that from January to March this year, Poland, Azerbaijan, and China led the purchases, and the Central Bank of Iran is also further increasing its gold holdings.

In stark contrast to the enthusiasm for central bank gold purchases, the jewelry industry is facing a huge impact from soaring gold prices. Global gold jewelry manufacturing has already dropped by 9% to 2,011 tons in 2024, and is expected to plummet further by 16% in 2025, with the Indian market accounting for a significant portion of this decline.

Metals Focus predicts that after a 23% increase in gold prices in 2024, the average gold price will soar by another 35% in 2025, reaching $3,210 per ounce, and may perform even stronger in 2026.