2026-02-25 15:06:00
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Persistent Central Bank Buying as a Medium-Term Anchor
As 2026 unfolds, one of the key structural drivers behind gold’s high-level consolidation is the continued net buying by central banks. According to recent World Gold Council statistics, central banks purchased around 850 tonnes of gold in 2025, slightly below the more than 1,000-tonne annual pace seen since 2022 but still well above the roughly 600-tonne average of the previous decade. Consensus estimates suggest that central banks could add another 800 tonnes or so in 2026, equivalent to roughly 26% of annual mine output, effectively establishing a sizeable, structural source of demand in the global gold market.
The motivations are predominantly strategic. Many emerging-market and some developed-market central banks have been steadily increasing the share of gold in their reserve portfolios, seeking to diversify away from concentrated exposure to a single currency and to enhance the resilience of their reserves. Against a backdrop of elevated geopolitical risk and past instances of sovereign assets being frozen, gold’s role as a reserve asset that is not the liability of any one issuer has gained prominence, leading to accumulation patterns that resemble long?term, multi-year portfolio restructuring rather than short-term trading.
De-Dollarisation Hedges and Concerns About Fiat Purchasing Power
At the broader macro level, ongoing central bank buying is often interpreted as part of a gradual “de-dollarisation” and a hedge against the erosion of fiatcurrency purchasing power. While the US dollar remains the dominant reserve and invoicing currency, a combination of high interest-rate regimes, rising fiscal deficits and uncertainty around the longterm inflation outlook has encouraged both reserve managers and institutional investors to maintain a non?trivial allocation to gold within diversified portfolios.
An additional structural feature in recent years has been the weakening of the traditional inverse correlation between gold and the US dollar, with gold at times showing resilience even in periods when the dollar is relatively firm. This shift reflects a broader perception of gold as a multi-faceted risk-management tool, rather than purely as an “anti-dollar” asset. In this context, central bank and long-term investor demand tends to express itself through gradual changes in allocation weights rather than aggressive, price-chasing behaviour, which helps underpin the medium-term price level even when short-term volatility is high.
Silver’s Role in the Structural Demand Narrative
Compared with gold, silver plays a much smaller role in official reserves, and thus benefits far less from central bank-driven demand. However, silver has its own structural demand story. As a precious metal, it often participates in safe-haven flows and risk-on/risk-off cycles alongside gold, but its extensive use in solar, electronics and other technology-related applications means that silver is also closely linked to industrial and investment-capex cycles.
Several precious-metals outlooks highlight that, with supply growth constrained and industrial demand expanding, silver could face the risk of structural deficits in the coming years, even though its short-term price remains heavily influenced by macro rate expectations and investor risk appetite. As a result, within the broader theme of structural demand, gold is primarily supported by central bank and reserve-management flows, while silver’s medium-term story is more closely tied to its dual role as both a precious and an industrial metal.
Outlook: Balancing Structural Support and Cyclical Repricing
Putting these elements together, the current environment for gold can be viewed as the interaction of two layers: a relatively stable, long-term layer of official and strategic demand, and a more volatile, cyclical layer driven by real yields, the dollar and macro data on growth and inflation. In such a framework:
When data flow and policy communication point towards lower real yields or a more accommodative rate path, structural demand and cyclical flows may align, allowing prices to move higher within an already elevated range.
When yields and the dollar strengthen on the back of robust growth or sticky inflation, short-term speculative and tactical flows may reduce exposure, but structural buyers typically respond by slowing, rather than reversing, their accumulation, helping to cushion downside moves over a longer horizon.
For
market participants, central bank and long-term investor behaviour is therefore more relevant for understanding
the “level” and medium-term centre of
gravity of gold prices, while day-to-day moves remain
largely a function of cyclical macro repricing and shifts in sentiment. Viewing
gold and, to a different extent, silver through this dual lens of structural
demand and cyclical volatility provides an additional angle for analysing the
market beyond immediate price action or short-term flows.
Upway Global: Driving New Patterns in Gold Investment
Upway Global, a prominent brand under Upway Group, has been rooted in the market for over 16 years, holding Grade AA member status (No. 084) at the HKGX and serving as a core member of Bullion Group. As a key player in the precious metals investment sector, Upway Global strictly follows international purity and quality standards, earning the prestigious “Recognised Delivery Bar Refiner Certificate,” ranking among Hong Kong’s top refiners. The brand focuses on offering diverse electronic trading in precious metals, its outstanding market performance includes a single-day XAU turnover reaching USD 80.75 billion in 2025, with over 2.1 million active members and over 7.6 billion cumulative orders, maintaining the highest average monthly trading volume at the HKGX.
At the same time, Upway Global recognises that user experience is central to brand competitiveness. Our platform offers 24/7 multilingual customer support, with dedicated service specialists assisting clients around the clock. Standing side by side with investors in a rapidly changing market, Upway Global helps clients achieve steady asset growth through reliable and professional services.
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