Central Banks Keep Buying Gold, Most of It Off the Books

Global gold demand held near record territory in the third quarter of 2026, with central banks, exchange-traded funds (ETFs), and rising prices combining to produce one of the strangest demand pictures in years. According to the World Gold Council’s latest report, total global gold demand reached 1,369 tonnes in Q3, down just 1% from a year earlier, while year-to-date demand of 3,881 tonnes is essentially tied with 2025’s record pace. The dollar value of that demand hit a record $566 billion for the year so far, a reflection of how high prices are inflating the value of gold flows even as the physical tonnage moving through the market has leveled off. The average LBMA (London Bullion Market Association) price for gold came in at US$4,262 per ounce in the quarter, the third-highest quarterly average on record and 23% above year-ago levels.

The most striking figure in the report is not how much gold central banks bought, but how little of it they admitted to. Official-sector demand jumped to 321 tonnes in the third quarter, well above the five-year quarterly average of 227 tonnes, and pushed year-to-date central bank buying to 675 tonnes, up 6% from last year. Yet only 120 tonnes, roughly 37% of the total, was officially reported. The remaining 63% went unreported, continuing a pattern of opacity that has persisted since 2022. China’s central bank was the largest reported buyer at 63 tonnes, followed by Poland at 40 tonnes, together accounting for about 86% of all reported official purchases. As Peter Schiff put it on a recent episode of his podcast, discussing China’s gold accumulation, “I think their strategy is to replace their dollars with gold to have a much stronger backing for their currency, whether they ultimately want to recreate an alternative reserve currency to the dollar, one that would be backed by gold, maybe even redeemable in gold.”

Investment demand told a similarly divided story. Physically-backed gold ETFs reversed the prior quarter’s outflows, adding 211 tonnes and pushing global holdings to a record 4,256 tonnes on record quarterly inflows of US$31 billion. North American funds alone added 81 tonnes, with buying accelerating in August amid what the report describes as concerns over fiscal sustainability and currency market intervention, even as the Federal Reserve raised interest rates during the quarter. Retail investors moved the opposite direction: bar and coin demand fell 19% to a four-year low of 268 tonnes, while jewelry volumes dropped 17% to their weakest third quarter since 2000, even as jewelry spending in dollar terms rose.

On the supply side, mine production reached a third-quarter record of 1,071 tonnes, but recycled gold fell 8% to a three-year low, leaving total supply down slightly overall. The report notes little evidence of distress-driven selling despite rising costs and unemployment signs, suggesting many holders see more upside ahead. Mining costs, meanwhile, hit a record US$1,930 per ounce in the prior quarter, up 22% year-over-year, the steepest cost inflation since 2013.

Taken together, the data point to a gold market shaped less by jewelry counters and coin shops than by institutions and governments quietly repositioning around currency and fiscal concerns. With U.S. long-run inflation expectations near a 19-year high and the World Gold Council itself citing fiscal concerns, inflation risks, and financial market stress as drivers of Q4 demand, the pattern looks less like speculation and more like a vote of no confidence in paper currencies.