Central Bank Gold Buying Accelerates to 20-Month High, but Rate Worries Keep a Lid on Prices
Published on 07/13/2026 at 13:36 | Redaktion boerse-global.de
Even as China’s central bank pushed its gold purchases to the highest monthly level in nearly two years, bullion extended its slide, underscoring how deeply rate-hike fears have overridden the usual support from official-sector demand. The precious metal fell 1.26% on Monday to $4,075.60 an ounce, bringing its weekly decline to 2.42% and its year-to-date loss to 6.13%.
The People’s Bank of China added 15 tonnes to its reserves in June, the largest single-month buy since October 2023 and the 20th consecutive month of accumulation. Holdings reached 75.44 million fine ounces by the end of last month, equivalent to roughly 2,346 tonnes. The buying spree marks a clear acceleration: China’s total additions for the year now exceed 40 tonnes.
Beijing is far from alone. The World Gold Council’s latest survey of 74 central banks found that 45% intend to increase their gold holdings over the next twelve months — the highest proportion since the poll began. Only one institution plans to cut its reserves. Poland remains the most aggressive official buyer, having stacked 64 tonnes by May, while Uzbekistan added 9 tonnes in June alone for a year-to-date net total of 41 tonnes. Kazakhstan and the Czech Republic have also joined the trend, with purchases of 6.5 tonnes and 3.4 tonnes respectively so far in 2026.
Even smaller economies are getting involved. Tanzania bought around 28 tonnes over the previous 18 months, worth roughly $3.68 billion. India’s gold reserves jumped by $2.67 billion to $105.21 billion in the week to July 4, further evidence of the metal’s growing appeal as a reserve asset.
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Yet the price keeps falling. The drag comes overwhelmingly from interest-rate expectations. Minutes from the Fed’s June meeting revealed rising inflation concerns, with some policymakers arguing for a rate increase before the committee eventually held steady. Oil prices climbed after the U.S. launched its fourth attack against Iran in a week, a retaliation for an Iranian strike on a Cypriot-flagged container ship, adding to anxieties that higher energy costs could push the Fed to tighten further. Markets now anticipate another rate hike before year-end, and Fed Chair Kevin Warsh is set to appear before Congress on Tuesday for the first time. Investors are also bracing for fresh U.S. inflation data later this week.
Technically, gold looks stretched. The relative strength index stands at 40.6, and the annualized volatility has climbed to 27.13%. The metal is trading well below its 50-day moving average of $4,356.35, while its distance from the 200-day average is 9.07%. A full 26.64% separates the current price from the record high of $5,626.80 set in January. At the other end, the 52-week low of $3,901.30 from October 2025 is only 4.47% away.
The gap between institutional and private demand highlights the market’s fracture. In India, price volatility has pushed premiums into steep discounts, whereas Chinese consumer buying has held steady. The divergence suggests that retail flows are more sensitive to short-term rate expectations, while central banks take a longer view.
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Geopolitical crosscurrents add another layer of uncertainty. Despite the recent escalation, reports indicate that U.S.-Iran talks are still being pursued, leaving the outlook for oil and inflation finely balanced. The consolidation may persist until the rate outlook shifts decisively. Should this week’s inflation data come in weaker than expected, the policy pressure could ease quickly, allowing the structural central-bank demand to reassert itself. Until then, the three-way tug-of-war between official buyers, hawkish monetary policy, and Middle East tensions is likely to keep gold trapped in a tight range.
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