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Central Banks' Gold Rush to Slow in 2026 Amid Easing Risks, Says Report

A YES Bank report forecasts that global central banks will continue purchasing gold as a reserve asset in 2026, but the pace of accumulation is expected to moderate. This slowdown is attributed to potential easing in geopolitical tensions, evolving monetary policy, and possible shifts in the US dollar's strength. The report notes that recent Federal Reserve rate cuts have supported gold prices, but a stronger dollar later in 2026 could pose a challenge. It also highlights that silver is outperforming gold due to robust industrial demand from sectors like renewable energy and EVs.

Key Points: Central Bank Gold Buying to Slow in 2026: YES Bank Report

  • Slower gold buying pace in 2026
  • Easing geopolitical risks a key factor
  • US Fed rate cuts support prices
  • Strong dollar could be headwind
  • Silver outperforms on industrial demand
2 min read

Global central banks gold buying likely to continue in 2026, but at slower pace: Report

YES Bank report predicts central banks will keep buying gold in 2026 but at a slower pace due to easing geopolitical risks and shifting US dollar dynamics.

"Gold's role as a strategic reserve asset remains intact - YES Bank Economics Research"

New Delhi, January 6

Gold as a reserve currency by global central banks may continue in 2026, the pace, however, may slow, driven by easing geopolitical risks, evolving monetary policy dynamics and potential shifts in the US dollar trajectory, according to a recent report by YES Bank Economics Research.

The report notes that heightened global uncertainty and increasing bets against the US dollar as a dominant reserve currency had led to a sharp surge in central bank gold purchases in recent years. While this structural trend is expected to persist, the momentum of accumulation may moderate in 2026 as risk premiums cool and macroeconomic conditions stabilise.

YES Bank report highlighted that the US Federal Reserve's rate-cutting cycle, which resumed in September 2025, has been a key driver supporting gold prices, alongside weakening labour market data and softer inflation prints in the United States. Expectations of further rate cuts could continue to exert depreciation pressure on the dollar index, lending near-term support to gold.

However, the report cautioned that the probability of dollar appreciation in the second half of 2026 cannot be ruled out, particularly due to growth differentials between the US and other major economies such as Europe. A stronger dollar could emerge as a headwind for gold prices and temper central bank demand.

Central bank net gold purchases have remained well above long-term averages, reflecting sustained diversification away from traditional reserve assets. Yet, the report observed that any easing in geopolitical tensions could reduce the urgency for aggressive reserve accumulation.

On prices, YES Bank's technical analysis projects gold extending towards USD 4,500-4,550 per ounce, provided it sustains levels above USD 4,400, while a drop below USD 4,200 could invalidate the bullish outlook.

The report added that silver continues to outperform gold, supported by strong industrial demand from sectors such as renewable energy, electric vehicles, data centres and defence, alongside a tightening supply environment.

Overall, while gold's role as a strategic reserve asset remains intact, the report expects central bank buying to transition from an exceptional surge to a more measured pace in 2026.

- ANI

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Reader Comments

P
Priya S
Interesting analysis. But the report seems very US-centric in its drivers. What about the role of China and other BRICS nations in gold buying? Their strategy to de-dollarize could keep demand strong regardless of Fed rates. The perspective feels incomplete.
R
Rohit P
Gold at $4500? That's huge! Time to tell my parents to hold on to the family jewellery a bit longer 😂. On a serious note, with elections in many countries next year, geopolitical risk might not cool down as much as they think.
S
Sarah B
The point about silver is key. The industrial demand from EVs and solar is a game-changer. Might be a better investment bet than gold for the next decade, especially for younger investors looking at growth.
V
Vikram M
Good to see an Indian bank's research being quoted on global trends. YES Bank has done a decent job here. Ultimately, for the common man in India, physical gold in some form (coins, ETFs) is always a safe part of the portfolio. Old habits die hard, and for good reason!
K
Karthik V
The slowing pace makes sense. You can't keep buying at a record pace forever. It's like eating sweets during Diwali—a burst of activity, then back to normal consumption. The structural shift towards diversifying *away* from the dollar is what's permanent.

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