Central Banks’ Gold Floor Looks Thinner After a 187-Tonne Revision

Central-bank buying has long been treated as the floor beneath gold. A 187-tonne revision shows that floor is less solid - and less observable - than the market assumed.

The World Gold Council initially estimated that central banks and other official institutions bought 244 tonnes in the first quarter. Its updated data now put the figure at just 57 tonnes, according to the Financial Times, the weakest first-quarter total in more than 15 years. First-half purchases of 345 tonnes were the lowest since 2022.

That revision matters because official-sector demand has become central to the bullish case for bullion. Central banks accumulated roughly 1,000 tonnes a year over the previous four years, double the average pace of the preceding decade. Surveys still show strong intent: 89% of reserve managers expect global official holdings to rise over the next year and 45% expect their own institutions to add gold.

Intent, however, is not the same as executed demand. Gold’s surge to above $5,400 an ounce in January raised the cost of adding reserves, while the subsequent drop increased the risk that purchases made near the peak would crystallise accounting volatility. The IMF estimates that the market value of central-bank gold rose by about $3.2 trillion between 2018 and 2025 even though physical holdings increased only 8.5%, showing how much of the apparent reserve expansion came from revaluation rather than new metal.

The data problem compounds the demand problem. Official gold statistics combine disclosed transactions with estimates for purchases that appear only later, if at all. Some flows can also be reclassified between central-bank and over-the-counter demand. The gap between the original and revised first-quarter numbers is therefore not merely a forecasting miss; it is evidence that one of gold’s most important demand categories is measured with a long lag and a wide error band.

Reported buying has not stopped. World Gold Council data showed net additions of 41 tonnes in May, led by Poland with 18 tonnes and China with 10 tonnes, while Uzbekistan, Kazakhstan and Singapore also bought. But a handful of repeat buyers cannot by themselves validate the assumption that the entire official sector will absorb metal at any price.

Samarium’s gold-price series fell $20.84, or 0.51%, over the latest 24 hours, from $4,064.05 at 08:59 UTC on July 31 to $4,043.21 at 07:59 UTC on August 1. The period’s high was $4,064.05 and its low was $4,028.01, with the market failing to hold an early level above $4,060 before stabilising near $4,043.

The price move is modest compared with the scale of the data revision. The more important implication is that investors may need to apply a credibility discount to central-bank-demand estimates, just as reserve managers apply liquidity and market-risk haircuts to gold itself.

The next test will be whether disclosed purchases accelerate in the third quarter and whether subsequent World Gold Council revisions restore part of the missing tonnage. Until then, central banks remain structural buyers - but not the automatic, price-insensitive backstop implied by the earlier numbers.