In recent years, a particularly noticeable phenomenon has emerged—central banks around the world are desperately buying gold. Data from the World Gold Council shows that many countries' central banks have maintained a buying pace for several consecutive quarters. The scale and continuity of these purchases have given a strong boost to the gold market.

Why do central banks place such importance on gold? First, it’s about risk aversion. Think about it—currently, global economic growth is slowing down, and geopolitical situations are so complex. The stability of currencies like the US dollar and euro, which rely on credit, has begun to waver. Gold is different—it has no credit risk and can effectively hedge against currency devaluation and inflation pressures. For central banks, this is an essential component when building foreign exchange reserves.

Second, the relative position of the US dollar is declining. For a long time, the dollar has been the dominant global reserve currency, but the problem is—recent years have seen the US’s monetary policy become particularly turbulent, with frequent rate hikes and cuts. This has posed real risks to countries’ foreign exchange reserves. As a result, many nations are adjusting their strategies, increasing their gold holdings, and reducing dependence on the dollar, aiming to make their reserve assets safer and more stable.

Another perspective is international trade settlement. In some geopolitically conflicted regions, dollar settlement channels are restricted, and the payment function of gold has been reactivated. Central banks have also realized that accumulating gold not only preserves value but also ensures the normal operation of international trade during special periods.

This ongoing trend of central bank gold purchases provides long-term support for higher gold prices.