Who’s buying gold and why?
Peter McGahan
Monday 1st December, 2025.
IN my sixth column on the rush to gold, I wanted to cover who was buying it and why.
In 2025, Central banks emerged as the world’s most consistent gold buyers, purchasing over 1,000 tonnes per year since 2022. According to the World Gold Council, 2024 alone saw a record 1,045 tonnes added to official reserves.
This isn’t about profit. It is about sovereignty, which I explained in my recent long series on the ‘end of the dollar’.
Since the freezing of Russia’s dollar reserves in 2022, many countries have rethought their exposure to the US dollar. The former chief economist of the International Monetary Fund said: World central banks are not buying gold to make money. They are buying it so no one else can hold that leverage over them.
This shift has brought new countries to the gold table. Poland (largest buyer in 2025), China, Turkey, India and Kazakhstan are now among the most active buyers. The Reserve Bank of India recently passed $100 billion in gold holdings.
Beyond the ‘money people’ - central banks - gold demand has its cultural foundations. For centuries, India and China have underpinned the global gold market, not with financials like ETFs or derivatives, but with actual bracelets, coins, and dowries.
In India, gold is wealth you can wear, store, gift or melt. It is passed through generations, tied to weddings, festivals and a worldview which sees security as tangible – stuff you can see and touch. Jewellery demand in 2024 reached around 600 tonnes. That society is growing and becoming much wealthier.
China’s demand totalled around 575 tonnes last year, driven by status, tradition and rising middle-class wealth. Gold gifts mark progress, family strength and continuity.
What’s very important and what binds both countries, is the durability of their demand. Prices rise so buying pauses. Prices fall, and accumulation resumes. This is not market-timing. It is cultural behaviour with staying power.
Put these forces together - official sector buying and deep-rooted consumer demand - and a clearer picture emerges.
Between central banks and Asia’s cultural markets, gold now has two enduring anchors:
· Over 1,000 tonnes per year from central banks, acting as long-term insurance
· Around 1,200 tonnes per year from India and China, driven by tradition and aspiration
With global mine supply stuck at around 3,660 tonnes, and facing pressure from declining ore grades and environmental constraints, there is little spare metal left for speculative demand.
Western investor flows might grab the headlines, but they now rest on a demand base which is steady, structural, and anything but ‘speculative’.
When prices surge, many ask, “who is buying now?” But the better question might be, “who keeps buying when prices fall?”
The answer is not hedge funds or ETF traders. It is the Reserve Bank of India. It is a family jeweller in Guangdong. It is a policymaker in Ankara trying to insure the nation against sanctions.
These buyers give the market support. When exchange-traded funds offloaded gold in 2021 and 2022, the price did not collapse. The vacuum was quietly filled by sovereigns and households. The market held.
This transition marks a deeper change in the gold market’s dynamics. For years, price direction was often steered by Western funds. Now, those flows are supported by a more global and resilient base.
In Mumbai, buyers queue at the counter when the price dips. In Beijing, demand returns on seasonal cues. In Warsaw and Istanbul, policymakers make decisions which will hold for decades.
The West ‘money boys’ may still set the spot price day to day. But increasingly, the East and the global South shape the longer-term demand curve.
This shift should temper the idea that gold’s fate is tied solely to short-term inflation or interest rate decisions. Structural demand gives gold resilience in a way few other assets can match.
It does not guarantee price rises. But it does help explain why gold has avoided deep collapses, even during profit-taking or periods of strong dollar strength.
And it points to a key principle: if you believe in the long-term case for gold, it should be bought not as a reaction, but as a foundation. Just as central banks do.
Gold’s demand story is no longer just a Western investor narrative. It is geopolitical. It is cultural. It is strategic.
When you see the price move, look past the ETFs and social media noise. Ask instead what India’s jewellers are doing. Ask what China’s central bank is buying. Ask who is filling vaults quietly while others tweet charts.
Gold’s new order is not built on sentiment. It is built on purpose. And that purpose is not going away.
I will be writing a formal guide on gold. If you’d like a complimentary copy, contact us and we’ll send it once published. Please call 01872 222422 or email info@wwfp.net to request your copy.
Peter McGahan is the Chief Executive Officer of Independent Financial Adviser firm, Worldwide Financial Planning. Worldwide Financial Planning is authorised and regulated by the Financial Conduct Authority.
