Central Banks Boost Gold Buying to 288.9 Tonnes in Q2

Central banks purchased 288.9 tonnes of gold in the second quarter. This volume represents a 4.1-fold increase from the 56.5 tonnes bought in the first quarter. The data, released by the World Gold Council, marks a sharp acceleration in sovereign metal accumulation.

Ultra-high-net-worth individuals also increased their buying. Their net purchases rose 34% to 327.1 tonnes. This group moved from 243.7 tonnes in the prior quarter to the new total. The simultaneous rise in institutional and private demand indicates a broad-based shift in asset allocation.

Gold Reserves Overtake U.S. Treasuries

Gold now constitutes 27% of global central bank foreign exchange reserves. U.S. Treasuries hold a 22% share of these portfolios. This marks the first time gold has surpassed Treasuries in reserve composition. The Bank of Korea contributed to this trend by investing $250 million in gold ETFs.

This was the first time since 2013 that South Korea’s central bank acquired gold-linked assets. Global gold ETFs saw net inflows of $18 billion in August. This figure is the second-largest monthly inflow on record. Institutional investors are diversifying beyond physical bullion into exchange-traded products.

Treasury Yields Spike Amid Fiscal Concerns

U.S. federal debt increased by $2.8 trillion over the past year. This is the fastest growth pace outside the pandemic period. Investors demand higher yields to compensate for perceived fiscal risk. The safe-haven status of Treasuries is weakening as yields reach record highs.

BlackRock notes that stock and bond correlations have risen since 2020. This reduces the effectiveness of bonds as a portfolio diversifier. The Financial Times reported that a London gold storage facility has reached capacity. The facility requires expansion to handle surging demand from global buyers.

Spot Gold Prices Hit New Highs

Spot gold prices reached $4,409.9 per troy ounce at the end of August. This is an 8.23% increase from the end of July. August returns of 13% were the highest since December 2025. According to GN auto markets/commodities: gold prices, the metal gained $4,563 per ounce during the month.

This gain ranks as the third-highest in 25 years. The price trajectory reflects strong demand from both state and private sectors. Gold is gaining traction as an asset free from sovereign credit risk. The realignment of safe-haven assets continues as fiscal confidence in the U.S. wavers.