Introduction
A view doing the rounds in market commentary this week holds that the real engine of the gold market is something nobody can see: central banks quietly buying bullion without telling anyone. It is a tidy story, and it flatters the reader for being in on a secret.
The odd part is that the numbers behind it are published. Not perfectly, and not quickly, but they are published. Here is what the data actually says, and what a UK investor should reasonably take from it.
The information provided on this page and throughout the website is for general information purposes only and does not constitute financial advice. Investments can fall as well as rise in value and you may get back less than you put in. Past performance is not a guide to future returns. It is important that you conduct your own research and consider your own personal circumstances before making any investment decisions.
The Claim Being Made
The argument runs roughly like this. Gold mine supply has barely grown in a decade. Reported demand has risen steadily. Yet the price has moved far more than either fact alone would explain. Therefore something unmeasured must be doing the heavy lifting, and the likeliest candidate is central banks buying gold without disclosing it.
Central banks are not obliged to announce gold purchases in real time, and disclosure to the International Monetary Fund is voluntary in practice and often delayed. The premise is not fanciful. The question is whether the scale of that buying is genuinely unknown, or merely estimated.
Why Central Banks Hold Gold At All
A central bank holds foreign currency reserves so it can defend its currency, settle international obligations and absorb shocks. Most of those reserves sit in other governments’ bonds, largely US Treasuries. Gold is the part of the pile that belongs to nobody else.
That is its appeal. A bond is somebody’s promise, and promises can be frozen, devalued or broken. A bar of gold in a vault is not a claim on any government. For a country worried about sanctions, currency weakness, or simply having too many eggs in the dollar basket, gold is the diversifier of last resort. That logic has little to do with the price and a great deal to do with sovereignty, which is why buying continues across very different market conditions.
What The Data Actually Shows
The World Gold Council put net central bank purchases at 863 tonnes in 2025, down 21 per cent from 1,092 tonnes in 2024. That was the first year since 2021 in which the official sector bought less than 1,000 tonnes. It still sat well above the 473 tonne annual average across 2010 to 2021, the period since central banks first became net buyers as a group.
So the direction of travel is real but softening. Buying slowed in a year when prices repeatedly hit records, which suggests central banks are not indifferent to what they pay, even when the strategic case for holding gold is unchanged.
Central bank net gold purchases
Tonnes per year, with the 2025 total split by whether the purchase was publicly reported
Source: World Gold Council, Gold Demand Trends, Q4 and full year 2025, published 29 January 2026. The 2025 split uses the World Gold Council estimate that 57 per cent of the annual total was unreported.
The chart shows the shape of it. Buying in 2025 was materially lower than in 2024, still far above the long run average, and mostly undisclosed at the time it happened.
More Than Half Was Never Reported
This is where the claim earns its keep. The World Gold Council states plainly that the gap between the estimates it uses and officially reported figures points to substantial opaque activity, amounting to 57 per cent of the 2025 annual total. On those figures, roughly 371 tonnes were disclosed and around 492 tonnes were not.
Note what that actually means. The unreported portion is not invisible. It is inferred from the difference between physical market flows and what institutions admit to holding, and the estimate is published in a free quarterly report that anyone can read. Unreported is not the same as unknown.
Among the institutions that did disclose, the buying was spread widely rather than concentrated in one place.
Disclosed central bank gold buying in 2025
Source: World Gold Council, Gold Demand Trends, Q4 and full year 2025. Figures are reported changes available at the time of publication.
Reductions were far more limited. The Monetary Authority of Singapore sold 15 tonnes, the Central Bank of Russia 6 tonnes, and the Bundesbank 1 tonne for its coin minting programme. Against record prices, almost nobody chose to take profits.
What Is Genuinely Uncertain
Three things deserve honest labelling as unknowns rather than facts.
- The size of the unreported figure is an estimate. It is produced by specialist research firms reconciling physical market flows against declared holdings. It is the best number available, not a measured one, and it gets revised.
- Attribution is guesswork. Nobody publishes a list of which institutions are buying quietly. Naming one is speculation dressed as analysis.
- Official sector buying is not the whole price story. Total gold supply hit a record 5,002 tonnes in 2025, with mine production at 3,672 tonnes and recycling at 1,404 tonnes. Against that, 863 tonnes of central bank buying is meaningful, but it is roughly a sixth of supply. Investment demand, the dollar, real interest rates and geopolitics all move the price too.
The last point is worth sitting with, because 2026 has already tested the simple version of the story. Gold spent much of July trading at its lows for the year, dipping below 4,000 US dollars an ounce, against an average of 4,595.75 dollars across the first seven months of 2026. Central banks did not stop existing during those weeks. A single explanation rarely survives contact with a real price chart.
What This Means For A UK Portfolio
UK investors most often access gold through exchange traded commodities, which track the gold price and can usually be held inside a stocks and shares ISA or a SIPP. If you already hold a broad global index fund, you may also have indirect exposure through the gold mining companies sitting inside that index.
Commodity products sometimes carry different charges from ordinary funds, so it is worth checking what your platform actually costs before adding one. Our UK broker fees calculator compares running costs across providers, and Find Your Broker narrows the field to platforms that offer the products you want.
The more important point is what gold does not do. It pays no income. No dividend, no coupon, no interest. Its entire return depends on somebody paying more for it later. That matters more than usual right now. The Bank of England held Bank Rate at 3.75 per cent on 30 July 2026, with UK inflation at 2.6 per cent against the 2 per cent target, so cash is still paying a real return for savers who shop around. Holding a non-yielding asset has a cost, and our compound interest calculator makes that gap easy to see over long periods.
What To Watch Next
- 17 September 2026. The next Bank of England interest rate decision. The Bank has said it expects inflation to rise later this year because of higher energy prices, and Governor Andrew Bailey has framed the job as making sure any increase is temporary.
- The quarterly gold demand data. The World Gold Council publishes free quarterly figures, including its estimate of unreported official sector buying. That is the number to check, rather than the commentary written about it.
- Stated reserve targets. Poland has signalled a 30 per cent gold allocation and the Czech National Bank has a 100 tonne target for 2028. Publicly announced intentions are far more useful than inferred ones.
Key Takeaways
Buying slowed but stayed historically high
Central banks bought a net 863 tonnes of gold in 2025, down 21 per cent on 2024 but well above the 473 tonne annual average of 2010 to 2021.
Most of it was never announced
The World Gold Council estimates that 57 per cent of 2025 official sector buying went unreported, roughly 492 of the 863 tonnes.
Unreported is not the same as unknown
The scale is inferred rather than measured, and it is published free every quarter. The identity of the quiet buyers is not published at all.
It is one driver, not the driver
Official sector buying is roughly a sixth of the record 5,002 tonnes of gold supplied in 2025. Investment flows, real interest rates and the dollar matter too.
Gold pays you nothing to wait
With UK Bank Rate at 3.75 per cent and inflation at 2.6 per cent, holding a non-yielding asset carries a real and measurable cost.
Figures in this article were checked against the World Gold Council Gold Demand Trends report for the fourth quarter and full year 2025, published 29 January 2026; the Bank of England interest rate decision of 30 July 2026; the Office for National Statistics consumer price inflation bulletin for June 2026, published 22 July 2026; and London Bullion Market Association price data as reported on 12 August 2026.
The information provided on this page and throughout the website is for general information purposes only and does not constitute financial advice. Investments can fall as well as rise in value and you may get back less than you put in. Past performance is not a guide to future returns. It is important that you conduct your own research and consider your own personal circumstances before making any investment decisions.
