Central Banks Bought 289 Tonnes of Gold Last Quarter, 62% More Than a Year Earlier. The Price Still Fell to a Two-Month Low This Week.

Gold spot prices touched $4,130 an ounce on Tuesday, the lowest level since early August and 26% below the record $5,595 the metal hit in January. That's a steep slide for an asset central banks are buying at the fastest pace in nearly three years.

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What Changed

Two forces are doing most of the damage to gold this week. The dollar has firmed, and the 10-year Treasury yield climbed to 5.31%, its highest level since 2002. Higher yields raise the opportunity cost of holding a metal that pays no interest, and a stronger dollar makes gold pricier for buyers outside the United States.

The yield move looks backwards at first glance. The September jobs report, released Friday, showed nonfarm payrolls grew by just 29,000 against forecasts near 84,000, with the unemployment rate ticking up to 4.2%. Weak labor data usually pulls yields down. It did, briefly. Then the ISM services survey landed Monday with a prices-paid index of 74.0, the highest reading since July 2022, a day after a manufacturing prices-paid gauge of 77.9. Bond traders decided inflation, not a softening labor market, was the bigger problem, and yields resumed climbing.

Gold had already been drifting lower for months. Silver has outrun it by a wide margin over the past year, and the metal has sold off before whenever traders priced in higher odds of a Fed rate hike instead of a cut, as it did during an earlier seven-week low.

Why It Matters

The buying tells a different story than the price does. Central banks purchased 288.9 tonnes of gold in the second quarter, according to the World Gold Council, 62% more than the 177.9 tonnes they bought in the same quarter of 2025 and the strongest pace since late 2023.

Poland's central bank bought the most of anyone, adding 51 tonnes as it works toward a self-set target of 700 tonnes in reserves. China's central bank added the most since the fourth quarter of 2023, taking its official reserves to 2,346 tonnes, and followed that in August with a 20.2-tonne purchase, its largest single month since October 2023. Smaller buyers, including Uzbekistan, Kazakhstan, Jordan and the Czech Republic, added gold too. Turkey, Russia and Azerbaijan were net sellers in the first half of the year, which is why total demand for the first six months still came in at its lowest since 2022 even with the second-quarter rebound.

China's appetite extends beyond its central bank. Gold imports into the country topped 1,100 tonnes through August, already more than all of 2025 and the fastest import pace since at least 2017, helped by a yuan that has held steady and by mainland prices running above the world benchmark. Exchange-traded funds in China added roughly 44 tonnes over the same stretch, an 18% increase for the year. A World Gold Council survey published in June found a record 45% of central banks plan to add to their gold holdings over the next 12 months, more than in any prior year of the survey.

What to Watch Next

The Federal Reserve meets October 27-28, with its benchmark rate currently set at 3.75% to 4.00%. If the inflation signals from this week's ISM surveys show up in next month's consumer price data, the case for holding rates steady, or even raising them, gets stronger, and that tends to keep yields and the dollar firm, which is the combination gold has struggled against all week. A softer inflation print would cut the other way.

The more durable question is which buyer wins the argument over time. Retail and futures positioning can push gold around for weeks based on where traders think the Fed is headed. Central bank reserve managers, who plan in years rather than weeks, have been net buyers of gold every year since 2010 and show little sign of stopping. The dollar's own strength, which has already forced one government to spend heavily defending its currency this year, is itself one of the reasons several reserve managers started diversifying away from it in the first place.

The Pulse24 Take

Price and position aren't the same thing, and gold is a good reminder of that this week. The metal is down a quarter from its January peak, and the week's charts make it look like sentiment has turned. The buyers moving the slowest and the largest sums, central banks accumulating reserves, haven't changed their minds. Tracking a market on price alone can miss which direction the bigger, slower money is actually leaning.