Central Banks Ramp Up Gold Buying as Dollar Loses 23% of Its Power

• Gold buying is picking up as central banks add more gold, while the US dollar loses purchasing power and Gold Demand continues to rise
• Goldman Sachs estimates central banks bought 44 tonnes of gold in July, compared with 23 tonnes in reported purchases
• The decline in the US dollar’s purchasing power may add to gold’s appeal alongside reserve diversification and geopolitical uncertainty

Gold-buying narratives are gaining central attention again. The world’s central banks are once again focusing on gold as an important reserve asset and have now increased their gold-buying spree. The new data estimates that the central banks have purchased 44 tonnes of gold. This estimate is higher than the reported figure of 23 tonnes in July, highlighting how gold demand may be stronger than official figures suggest. In the middle of this, the US dollar’s purchasing power has tumbled dramatically, with the currency losing 23% of its purchasing power. This development may be another factor supporting gold demand as central banks continue to diversify their reserves.

Also Read: Kraken Financial Infrastructure Pivot Away From Retail to Focus on Institutional Investors

Central Bank Gold Demand May Be Higher Than Reported Figures

The gap between the two figures has put the central bank gold-buying spree into focus again. Goldman Sachs’ estimate has now put the collective world bank’s July gold purchase at 44 tonnes. The reported figures, however, tell a different story. Per the latest stats shared by the Kobeissi Letter, central banks had earlier reported purchasing 23 tonnes of gold in July.

“World central banks acquired +44 tonnes of gold in July, +158% above the pre-2022 average of +17 tonnes, according to Goldman Sachs. This brings the 3-month average of purchases to +91 tonnes, near its highest since mid-2025. By comparison, the 12-month moving average has oscillated between +50 and +60 tonnes over the last few months. Meanwhile, official central bank purchases of gold stood at +23 tonnes in July, or 21 tonnes below actual levels.”

Goldman Sachs had earlier described this shift as long-term reserve management.

The World Gold Council has also reported a steady increase in gold purchases by central banks in July, with China adding 20 tonnes and Poland adding 8 tonnes.

Simultaneously, reports indicate that Russia sold over 6 tonnes of gold during that period.

Also Read: Crypto Market Dominance Shift Accelerates as Bitcoin and Ethereum Lose 2.2% to Stablecoins

The US Dollar Continues To Lose Its Power

The US dollar’s purchasing power continues to be a centre of debate for many. In a new post by the Kobeissi Letter, the US dollar has lost 23% of its purchasing power, based on current CPI data.

The Bureau of Labour Statistics explains that when prices rise, the US dollar’s purchasing power falls, impacting the currency’s ability to purchase fewer goods and services.

“The US dollar has lost 23% of its purchasing power since 2020. In other words, if your assets are up +30% since 2020, you have effectively just broken even in real terms. Inflation has now been above the Fed’s 2% target for 60 straight months, and the bond market knows the truth. Own assets or be left behind.”

The loss of the US dollar’s purchasing power can add to the appeal of gold, alongside factors such as reserve diversification and geopolitical uncertainty. Central banks have continued to hold and add gold as part of their broader reserve management strategies.

Also Read: Bank of Japan Faces Policy Dilemma as Japan Bond Yield Surge Past 3% Evaporates Domestic Investor Demand