Central Banks Aren't Done Buying Gold, Says Bundesbank's Nagel — Even as Demand Cools
A senior euro-zone central banker says the official gold bid still has room to run, but a forecast 15% drop in buying and rising yields complicate the near-term tape for US bullion.
The head of Germany's Bundesbank, Joachim Nagel, used the LBMA's 2026 conference to make a blunt point: central banks aren't finished buying gold. Geopolitical risk, he argued, is reshaping how reserve managers allocate, and gold's share of global reserves has risen sharply in recent years.
Nagel wasn't talking about gold in a vacuum. He defended the ECB's two quarter-point hikes in June and September that lifted the deposit rate to 2.5%, and flagged inflation as an ongoing challenge after the U.S.-Iran conflict pushed crude from roughly $70 before summer to above $100. Higher oil, stickier inflation — the kind of mix that keeps gold in the reserve conversation.
The other side of the ledger came from Reuters, which cited forecasts that central-bank gold demand could fall about 15% in 2026, to roughly 720 tons. That's a cooling, not a collapse: even at 720 tons, official buyers remain a heavyweight presence in the market.
For US investors, the tension is familiar. The Federal Reserve's rate path sets the opportunity cost of holding a metal that pays no coupon, and when global yields grind higher, gold has to work against a stronger pull from Treasuries. That showed up in the price last month — gold dropped 6.6% in September to $4,152.86 after a strong run.
Strip out the noise and the structural case is intact. Reserve managers tend to buy on a schedule and a strategy rather than a chart, which makes official demand one of the more durable supports under the dollar gold price — a floor that matters more to a physical holder than any single month's move.
Market View
What outside analysts are saying, drawn from the sources below.
Joachim Nagel
President, Bundesbank
He argues central banks are not finished adding gold because geopolitical risks are reshaping reserve allocations, with gold's share of reserves rising sharply.
kitco.com ↗The MapleBull View
MixedThe structural story and the near-term tape are pulling in different directions, which is why we read this as mixed rather than cleanly bullish. Official-sector buying is a durable floor under the market — even the pessimistic forecast of ~720 tons is a large number, and reserve managers are not price-chasers, which tends to steady demand on dips. But a projected 15% decline in that buying, rising global yields and a 6.6% September drop show gold can correct hard when the opportunity cost of holding it climbs. For a physical buyer, the long-term reserve-diversification case stands; the short-term path is where the volatility lives.
Bull case
- Senior central bankers publicly frame gold as a strategic reserve asset tied to geopolitical risk, not just a trade
- Gold's share of global central-bank reserves has risen sharply in recent years
- Even the bearish 2026 forecast of ~720 tons represents continued heavy official-sector buying
- Elevated oil above $100 and lingering inflation support gold's role as a hedge
Bear case
- Reuters-cited forecasts point to central-bank gold demand falling about 15% in 2026
- Rising bond yields raise the opportunity cost of holding a non-yielding metal
- Gold fell 6.6% in September to $4,152.86, showing it is not immune to pullbacks
- ECB rate hikes to a 2.5% deposit rate signal a higher-for-longer yield backdrop
Sources
MapleBull researched this story from the following reporting. We summarize and analyze — we don't reproduce source articles.
MapleBull's analysis is researched and drafted with AI assistance from the cited sources, then quality-checked before publishing. It is for general information only and is not financial, investment, or trading advice. Prices and market conditions change quickly — do your own research before buying or selling.