Gold Price 2026: How Central Banks Made Gold Bigger Than US Treasuries in Reserves

Gold reached an all-time peak near $5,600 an ounce in January 2026 before easing to an intra-year floor of $4,170, according to J.P. Morgan Global Research, which nonetheless still projects the metal could push toward $6,000 by year-end (J.P. Morgan). The more structurally significant milestone, per Morgan Stanley Research, is quieter: gold now accounts for a larger share of central bank reserves than US Treasuries for the first time since 1996 (ISA Bullion).

The Data Nobody’s Headline Captures

Central banks purchased a net 244 metric tonnes of gold in the first quarter of 2026 alone, a 17% jump from the fourth quarter of 2025, according to the World Gold Council’s Gold Demand Trends report — even as the metal’s price had already doubled over the prior year, defying the conventional economic assumption that rising prices should cool institutional demand (Discovery Alert). Central bank purchases represented roughly 15% of total monthly global mine output at record price levels in late 2025, a scale of physical inventory absorption that creates genuine scarcity independent of speculative trading positions.

Why are central banks buying so much gold in 2026?

Central banks are buying record volumes of gold in 2026 to diversify away from dollar-denominated reserves after the 2022 freezing of Russian central bank assets showed that even sovereign holders are exposed to US sanctions risk, with gold now exceeding US Treasuries as a share of global reserves for the first time since 1996.

China’s Buying Is Bigger Than Its Official Numbers Suggest

J.P. Morgan’s commodities team notes that Chinese net gold imports jumped to 317 tonnes in the first quarter of 2026, nearly three times the prior quarter’s pace, while the People’s Bank of China’s own reported purchases accelerated from roughly one tonne a month through February to eight tonnes in April (J.P. Morgan). Analysts widely believe Beijing’s actual accumulation exceeds what it reports, since there is no mandatory requirement to disclose gold purchases to the IMF. The strategic motivation, per J.P. Morgan’s Shearer, traces directly back to 2022: the freezing of Russian central bank assets that year signalled to Beijing that dollar-denominated reserves are not unconditionally safe from US sanctions — a lesson China appears to be applying systematically as it builds reserves partly to support long-term ambitions for the renminbi as a credible alternative reserve currency.

The Gulf and Southeast Asia Are Diversifying Too

The Central Bank of the UAE has been actively diversifying its reserve mix into gold, consistent with a broader emerging-market trend, while Indonesia and Malaysia have also turned into net gold buyers, according to Mining.com’s tracking of World Gold Council data (Mining.com). Poland’s National Bank led all 2025 purchases, adding 102 tonnes to push its total reserves to 550 tonnes, while Kazakhstan set a new record for annual buying and Brazil re-entered the gold market after a four-year absence — evidence that reserve diversification away from the dollar has become a genuinely global phenomenon rather than a China-specific story.

Why the Iran War Complicates the Simple “Gold Rises With Fear” Story

Gold’s relationship with the Middle East conflict has been more complicated than a straightforward safe-haven narrative. Elevated energy prices from the war have simultaneously fuelled inflation fears that reduce expectations of Federal Reserve rate cuts — a dynamic that historically hurts gold, since the metal pays no yield and competes directly with higher-yielding assets when real rates rise (Mining.com). That tension helps explain why gold has traded largely sideways for much of 2026 after its initial spike, even as the underlying structural buying story from central banks has remained remarkably resilient.

The Forecast Split

J.P. Morgan projects gold reaching $6,000 by year-end 2026, with $6,300 possible in 2027, while ING’s more conservative house view puts the 2026 average closer to $4,325. The single biggest risk to the bullish case, according to J.P. Morgan’s own analysts, is a scenario where US growth and employment stay strong while inflation keeps accelerating — a combination that could embolden the Fed toward a genuine hiking cycle and crack investor demand for a non-yielding asset.