Why do central banks buy gold?

To make national reserves resilient. Gold is liquid, universally accepted and free of counterparty risk, so it cannot be frozen, defaulted on or inflated away by another government. The decision is about reserve composition, not about expected return.

Does central bank buying put a floor under the gold price?

It makes declines shallower and better absorbed because the buyer is largely price-insensitive and accumulates over months. It does not prevent multi-month drawdowns when real yields are rising and the dollar is firm.

Why does official-sector demand weaken the real-yield relationship?

Because mandate-driven buyers do not respond to carry cost. They keep accumulating when the real-yield argument says gold should be sold, which is one reason the measured correlation between gold and the 10-year real yield is only -0.27.

Can I trade central bank gold demand?

Not directly. Reporting is monthly or quarterly, revised and incomplete, so it offers no timing signal. Use it as a quarterly structural bias that adjusts target ambition and holding period, never as an entry trigger or a reason to widen stops.

Where does official gold reserve data come from?

IMF International Financial Statistics publishes national reserve holdings, and the World Gold Council aggregates quarterly official-sector demand. GoldHunts cites those primary sources rather than republishing unaudited figures.

CENTRAL BANK GOLD DEMAND

Name: GoldHunts macro snapshot
Creator: GoldHunts
License: https://creativecommons.org/licenses/by/4.0/

Central banks buy gold to diversify reserves away from single-currency and counterparty risk, not to earn a return. Because the decision is mandate-driven and executed over quarters, official-sector demand is largely price-insensitive, which puts a persistent floor under gold and weakens the usual real-yield and dollar relationships.

Central banks buy gold to diversify reserves away from single-currency and counterparty risk, so their demand is mandate-driven and largely insensitive to price or carry cost.

Because reserve managers accumulate quietly over months, official-sector demand absorbs supply on weakness and makes gold declines shallower without preventing them.

This price-insensitive buyer is one reason the measured correlation between XAUUSD and the US 10-year real yield is only -0.27 on GoldHunts data since 2015.