Central bank gold buying grows as reserve strategies shift

Central banks add to gold reserves as risks prompt reevaluation

Central banks have expanded their exposure to gold, according to public remarks at the LBMA Global Precious Metals Conference on October 5, 2026. Joachim Nagel, president of the Deutsche Bundesbank, stated that central banks’ gold holdings now represent close to 25 percent of total reserves, compared to roughly 14 percent in 2023. This shift is linked to both the rise in gold prices and growing concerns over the reliability of foreign assets.

Nagel explained that physical gold differs from reserve assets like government bonds and foreign deposits, which can be frozen by sanctions or called into question by credit risks. As a tangible asset without counterparty risk, physical gold is seen as directly accessible during periods of geopolitical and financial uncertainty. He noted that recent rises in government bond yields have made sovereign debt more appealing, but increasing government debt burdens have also heightened worries about their long-term reliability.

Central banks focus on the physical aspect of gold

Central banks’ interest in gold relates partly to its standing as a physical asset, instead of a digital or paper claim, which could be more easily restricted. Nagel said, “the case for further diversification into gold remains significant,” as instability increases in geopolitics and monetary policy. Germany’s Bundesbank, holding over 3,500 tonnes of gold, is the world’s second-largest official holder. For central banks, the intent is to provide a safeguard in an unpredictable environment.

While the reported increase in gold’s share within reserves is driven by both higher prices and new purchases, the source does not clarify how much of this gold is delivered as tangible bullion versus held in paper form or via claims stored abroad. Some reserve gold remains in vaults outside the central bank’s own country, and some may be claims on allocated or unallocated metal rather than physically held at home. For buyers of physical metal, the location, custody, and nature of those holdings, whether ownership or claim, remains a critical distinction, but specifics are rarely included in official reserve updates.

Watching for greater detail in gold reserve disclosures

We think the more useful question is how many of the reported central bank reserve increases involve actual movement or repatriation of gold bars, not just accounting or custodial changes. Central banks typically publish summary reports quarterly or annually, but the information about whether reserve gold is physical, its location, its custody, or any encumbrances is often limited or unclear. The source material focuses on motivations for holding gold, but gives little insight into these operational matters.

For anyone interested in the physical gold market, it is the detailed breakdown of central bank holdings, such as where gold is stored, what portion is in allocated or unallocated form, and what is kept within national borders versus abroad, that offers more insight than spot price news alone.

Source: LBMA 2026: Central banks aren’t done with gold as geopolitical risks reshape reserves – Bundesbank’s Nagel

This article is general information, not investment advice. Facts from other publications are their reporting, linked above.