Yet, one developed-market central bank once again proved a striking outlier. For the second year in a row, Poland stood out as the most aggressive buyer. The Polish central bank added 102 t in 2025, continuing a multi-year strategy of strengthening its gold position. Notably, Poland has announced plans to purchase another 150 t, which would raise its total gold reserves to approximately 700 t, placing it among the top ten gold-holding nations globally.

This recent pivot by the Polish central bank can be traced back to a distinct moment: the Russian invasion of Ukraine. According to the president of the National Bank of Poland (NBP), Adam Glapiński,

we [the NBP] will keep buying gold until we reach 700 tons, because that’s where we are on the political map…. A country that borders a war zone is subject to special scrutiny. Investors and international institutions assessing our credibility take our reserves into account.

On the flip side, Russia appeared among the sellers in 2025. This development is notable because the Russian central bank had been one of the most consistent buyers of gold between 2006 and 2021. The recent sales likely reflect the need to monetize reserves in order to finance the ongoing war effort, effectively allowing Russia to “sell the rally” in gold prices. All in all, owing to the gigantic accumulation of gold bullion coupled with the tremendous rally in the gold price, gold reserves are now, broadly speaking, the predominant asset held in the central banks’ balance sheets.

The importance of gold for central bank balance sheets was highlighted by the experience of the Bundesbank in 2025. Rising interest rates caused losses on the central bank’s bond holdings, leading to an annual loss of EUR 8.6bn. However, the surge in the gold price dramatically increased the value of the Bundesbank’s gold reserves.

Indeed, the valuation of the Bundesbank’s gold position on the revaluation account increased by EUR 125bn, which more than compensated for the decline in other assets. As a result, despite the losses recorded on the income statement, the Bundesbank’s net equity increased by EUR 112bn to EUR 363bn.

In Italy, political pressure has mounted to assert greater state control over the central bank’s gold reserves, framing them explicitly as part of national wealth available for public purposes. Undoubtedly, this debate is revealing that gold is being reconsidered, from an untouchable reserve asset to a funding source, even if temporarily.

Evidently, Poland provides an even clearer example of this emerging paradigm. Having been the largest central bank buyer since 2024, the National Bank of Poland has signaled a willingness to actively manage its gold holdings. Governor Adam Glapiński recently floated the idea of generating up to USD 13bn through gold transactions to finance defense spending, potentially selling gold with the intention of repurchasing it later. While details remain undefined, the message is unmistakable: Gold is increasingly seen as a balance sheet tool that can be mobilized in times of fiscal strain.

This marks an important shift in central banks’ working procedures and mentality. Besides viewing gold as a strategic reserve, they are beginning to recognize its optionality as a source of liquidity and fiscal flexibility. In this sense, gold is being quietly and discreetly remonetized, as it can be activated without the political and market consequences associated with conventional debt issuance.

Strikingly, Poland once again leads the buying side, adding approximately 20 t in January and February alone. Uzbekistan has extended its accumulation streak to five consecutive months, bringing year-to-date purchases to 16 t. China continues its steady and methodical approach, adding a further 2 t and marking its 16th consecutive month of purchases. Meanwhile, the Czech National Bank has quietly built one of the most consistent accumulation programs globally, with 36 consecutive months of buying and 4 t added so far this year.

On the selling side, Russia has liquidated roughly 15 t, while Tü rkiye has emerged as the most active tactical operator. After selling 8 t in February, the Turkish central bank significantly increased its activity in March, with estimates suggesting around 50 t were mobilized for liquidity provision and FX operations. Importantly, Turkish officials emphasized that a substantial portion of these transactions consists of gold-currency swaps, implying that much of the gold may eventually return to reserves.

Crucially, these developments illustrate that central bank demand is increasingly characterized by the dual dynamic of strategic buying on one hand and tactical liquidity management on the other.

Conviction Buyers vs. Opportunistic Buyers

To better understand the evolving dynamics of gold demand, it is useful to distinguish between conviction buyers and opportunistic buyers.

Due to their accumulation being largely insensitive to price fluctuations, conviction buyers are driven instead by strategic considerations such as inflation hedging, currency debasement, and protection against systemic risk. When these actors enter the market, they tend to absorb supply in a relatively inelastic manner, thereby setting the direction of the gold price.

Opportunistic buyers, by contrast, are highly price-sensitive, as they tend to increase purchases during price corrections and step back during rallies. Importantly, however, they rarely sell. In short, their behavior introduces a stabilizing mechanism into the market, providing a floor during downturns while naturally capping excessive upside during periods of strong price appreciation.

Investment Demand for Gold

While central banks provide the structural foundation of gold demand, private investors determine the marginal price dynamics. This became particularly evident in 2025, when investment demand surged to 2,175 t – an increase of roughly 84% yoy – driven by record ETF inflows and robust physical buying.