World Gold Council (WGC) data show global central banks are expected to keep buying gold in 2026 even after bullion prices rose more than 120% over the past two years. In the 2026 Central Bank Gold Reserves (CBGR) survey, run from 5 February to 1 May, 45% of reserve managers said they expect their own gold reserves to rise over the next 12 months, while 54% forecast no change and 1% expect a reduction. Separately, 89% of respondents anticipate total global central bank gold reserves will increase over the same period.
Purchases have averaged 1,000 tonnes per year over the past four years, compared with a 500-tonne average in the preceding decade, according to the WGC. The survey cites interest rate decisions as a key driver of gold reserve management, followed by geopolitical instability and inflation concerns. On motivations, 90% of respondents said gold’s crisis performance is highly relevant, while 84% referenced its store-of-value role and 83% its portfolio diversification attributes. On USD allocation, 74% expect moderate or lower US Dollar holdings within global reserves over the next five years, while EUR and RMB shares are expected to remain steady.
Central Bank Buying and Strategic Implications
Given that central banks are expected to continue buying gold, we see a strong floor forming under the current price. This consistent, price-insensitive demand suggests that significant dips are unlikely to last long. We should consider strategies that benefit from this stability, such as selling out-of-the-money put options to collect premium.
This view is supported by recent data showing global central banks added a net 290 tonnes in the first quarter of 2026, the strongest start to a year on record. The People’s Bank of China has now reportedly increased its gold reserves for 20 consecutive months, a clear signal of their long-term strategy. This persistent accumulation provides a powerful tailwind for the metal.
Macro Motives, Dollar Diversification, and Trading Tactics
The primary motivations, geopolitical instability and inflation, remain highly relevant. With recent U.S. inflation data for May 2026 coming in slightly above forecasts at 3.1%, gold’s appeal as a hedge is being reinforced. This environment supports bullish strategies, like establishing long positions in call options, to capitalize on potential price increases driven by safe-haven flows.
Furthermore, the expectation that a majority of reserve managers will reduce their US Dollar holdings over the next five years favors gold. As institutions look for alternatives, gold stands out as a primary beneficiary of this diversification. This structural shift away from the dollar strengthens the long-term bullish case.
After the strong rally earlier this year, gold has been consolidating, which we view as a healthy base-building phase. This price action is similar to the period between 2009 and 2011, when central bank buying after the financial crisis fueled a multi-year bull market. We believe long futures contracts are appropriate for traders anticipating a breakout from this current range in the coming weeks.
