Central banks accelerate gold buying as jewellery demand weakens

Central banks are becoming gold’s steadier buyer while jewellery demand breaks lower. Kitco reported on Nov. 3 that central banks purchased 321 tonnes of gold in the third quarter, up 42% from last year and above the five-year quarterly average of 227 tonnes.

The split inside demand is the point. Kitco reported Tuesday that total global gold demand fell 1% year over year to 1,369 tonnes, while jewellery demand fell 17% to 313 tonnes. Holdings in gold-backed exchange-traded funds rose by 211 tonnes to a record. The market is therefore less dependent on the shop counter and more dependent on official balance sheets and financial holders.

The World Gold Council did not treat the burst as a one-off. Kitco also reported Tuesday that central-bank purchases during the first nine months reached 675 tonnes, a rise of 6% from the same period last year. It said the WGC now expects official buying to at least match 2025 levels after surprisingly strong demand in the latest period.

The bid arrived in a market that had reasons to cool. Central banks bought at the fastest pace since the end of 2024 even as higher oil prices and interest rates pressured the metal. MarketScreener reported the same day that geopolitical risks and concerns over fiscal discipline bolstered institutional demand.

A state bid with a missing owner is harder to read than a state bid that comes with names. Mugglehead reported Tuesday that officially reported net purchases totalled 120 tonnes, while unreported activity accounted for around 63 per cent of the council’s estimate. That turns the published tally into a lower bound rather than a full map of official appetite.

The named buyers still matter because they show how uneven the increase was. Mugglehead reported Tuesday that the council attributed the largest disclosed purchase to the People’s Bank of China. It also reported that Poland’s buying slowed from the prior period, which means the aggregate surge did not require every large buyer to move in the same direction.

The timing also says something about the buyer. Kitco reported Tuesday that official-sector purchases accelerated as gold prices moderated from their first-quarter highs. John Reade, senior market strategist at the WGC, said weaker prices likely encouraged some central banks to step up purchases. IndexBox reported that strategic diversification and risk management remained the primary drivers.

That is the part many price-only stories miss. Central banks and other official institutions made estimated net purchases in July–September 2026 that were up from a year earlier. APA-Economics separately reported that global gold demand decreased year on year in the same period. The contradiction is not that gold demand was strong everywhere. It is that the buyer with the longest horizon strengthened while the consumer side weakened. That divergence makes a broad recovery in demand the less convincing explanation.

Gold Buying Can Still Be a Price Story

Gold buying can still be a price story, and that explanation earns room. A lower average price can pull forward official purchases without proving that central banks will chase the metal at any level.

Consumers faced the other side of that price move. Jewellery demand was the weakest third quarter in the council’s data going back to 2000, as tax changes in India and China, together with higher prices, pushed consumers toward lighter and lower-carat pieces. A person buying jewellery would feel that through smaller pieces or lower purity before noticing a reserve manager’s purchase.

Institutions face a different problem. Reserve managers and funds can see that state demand is present; they cannot see enough of the buyer list to know whether the next addition comes from a broad group or a few large accounts.

The split is the signal. If the next WGC update shows more buying reported by monetary authorities, the story becomes easier to price because named institutions can be tracked. If the estimate again outruns disclosures, the market will still have support, but less visibility into who is providing it.

Gold’s latest demand report is therefore not a simple bullish receipt. It shows a market in which official buyers are cushioning the metal while consumers step back, and the most important buyer is still partly off the public tape.