Central banks bought gold at the fastest pace in about two years in September, strengthening expectations that international gold prices will set another record high.
Central Bank Gold Purchases Reach 63 Tons as Safe-Haven Demand Grows
Central banks bought about 63 tons of gold in September, according to preliminary World Gold Council figures reported by the Financial Times on the 14th. That was the largest monthly total since November 2024. The WGC calculated the figures based on data disclosed by central banks and the International Monetary Fund.
Financial market experts said gold demand is likely to rise over the medium to long term as geopolitical tensions and economic uncertainty persist.
Charlotte Young, a fund manager at Troy Asset Management, told the FT precious metals symposium that she expects gold prices to surpass their record high within the next 12 to 18 months. She cited the possibility that central banks could expand money supply if a recession hits while U.S. government debt is rising rapidly.
She described gold as a way to hedge against the risk of deteriorating government finances, stressing that gold cannot be printed like currency.
Paul Kane, chief investment officer for Europe, the Middle East and Africa at Aon Investments, also predicted that gold prices would break their all-time high within two years. He said it would not be surprising if people stopped using the dollar should it be weaponized, asking what they would use instead.
Distrust in Dollar Underpins Gold Prices Amid Financial Crisis Warnings
Industry figures went as far as to raise the possibility of a major shock to financial markets. Peter Marrone, chairman and chief executive of mining company Allied Gold, said investors should ask themselves whether they are in the early stages of a financial crisis, adding that markets appear to be on the verge of a significant event.
As macroeconomic uncertainty grows, family offices managing assets for ultra-high-net-worth individuals are also reducing their government bond holdings and buying gold, the report said.
Ian Cockerill, chief executive of gold producer Endeavour Mining, said macroeconomic instability, declining confidence in fiat currency and moves by central banks to defend their own currencies are supporting gold prices. He said he does not know whether $4,000 per troy ounce is the floor, but believes it is very close to a low point ahead of the next upward phase.
Suki Cooper, head of global commodities research at Standard Chartered, said central bank demand for gold remains strong. She added, however, that some central banks sold gold this year as certain countries disposed of holdings to raise funds following the U.S.-Israeli war against Iran.