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Gold Holds Above $4,700 as Central Banks Stay the Course
Central bank gold buying continued at a steady clip through February, reinforcing a structural demand floor beneath a market that has pulled back 8% from its monthly highs but still sits near historically extraordinary levels.
What to know
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Central banks maintained consistent gold accumulation through February, extending a buying trend that has persisted since 2022.
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Gold is trading at $4,702.70/oz - down over 8% from its monthly peak of $5,229.70 but up nearly 4% on the week.
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The gold-to-silver ratio sits at 64.3, suggesting relative equilibrium between the two metals after recent volatility.
What happened
Central banks added to their gold reserves in February at a pace consistent with the multi-year trend documented in World Gold Council quarterly reports. The buying was neither a surge nor a retreat - steady accumulation that has defined official sector behaviour since 2022.
Gold is trading at $4,702.70/oz, down more than $500 from its monthly high of $5,229.70 but up nearly 4% over the past week. The February buying data covers a period when prices were already elevated by historical standards. Central banks are not waiting for dips - they are buying structurally, even at these levels.
Who’s involved
Emerging market central banks in Asia and the Middle East have been the dominant buyers over the past three years, and February appears to follow that pattern. China’s People’s Bank of China remains the most closely watched actor, though its reporting cadence makes real-time tracking difficult. Poland, India, and Turkey have also been consistent accumulators.
Western central banks have largely held steady. The European Central Bank, the Bank of England, and the Federal Reserve have made no significant changes to their reserves. The dynamic remains one of East buying and West holding.
ETF flows have been more mixed. While central bank demand provides a floor, investment demand through physically-backed ETFs has been choppy, reflecting broader uncertainty in a market that swung between $4,100 and $5,230 in a single month.
Why it matters
Steady central bank buying at $4,700 is a different proposition than buying below $2,000. These are strategic allocations driven by reserve diversification, de-dollarisation hedging, and geopolitical risk management - not opportunistic bargain-hunting.
World Gold Council data has shown central bank net purchases exceeding 1,000 tonnes annually for three consecutive years, a pace without precedent in modern monetary history. Even if monthly figures fluctuate, the direction is unambiguous.
For silver, the read-across is more nuanced. The gold-silver ratio at 64.3 suggests silver is holding its ground relative to gold, though silver’s 11.5% monthly decline has been steeper than gold’s 8.15% pullback. Central banks do not buy silver in meaningful quantities, so the structural demand floor that supports gold does not extend to the white metal.
What comes next
The Q1 2026 Gold Demand Trends report from the World Gold Council, due in the coming weeks, will provide the full picture of official sector activity - including any unreported purchases that surface with a lag.
Whether gold can consolidate above $4,700 is the immediate question. The month range of $4,100 to $5,230 represents extraordinary volatility, and central bank buying at these levels suggests a higher floor is being established - though that remains to be tested if macro conditions shift.
This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
