Credit: Kitco News

Central banks have significantly increased their gold purchases in recent years, with global reserves rising by over 1,000 tonnes annually in both 2022 and 2023.

This surge in buying has tripled central bank gold purchases' share in global demand, now representing between 25% and 30%. Analysts expect this trend to continue, with emerging market central banks potentially purchasing over 600 tonnes of gold annually until 2030 to diversify their foreign reserves.

Rising geopolitical uncertainty, economic risks, and inflation pressures are driving factors behind central bank gold purchases, along with a desire to diversify bond holdings away from U.S. Treasuries, which have faced challenges amid the Federal Reserve's aggressive tightening cycle.