CICC: Don't Overestimate the Momentum of Global Central Bank Gold Purchases

CICC research reports indicate that since 2025, gold prices have been rising steadily. One common view is that global central banks are buying large amounts of gold for risk hedging. However, after the outbreak of conflicts in the Middle East, gold price volatility has significantly increased. In fact, many factors influence gold prices, but the recent de-financialization trend worldwide has driven up physical asset prices, including gold. Under the new macro paradigm, traditional gold pricing frameworks are also being challenged. The correlation between central bank gold purchases and gold prices has strengthened, but data shows that in recent years, the main increase in gold holdings has come from central banks in emerging markets and developing countries, especially those with non-floating exchange rate economies. In developed countries, central banks have less need to intervene in exchange rates, and their foreign exchange reserves tend to be stable, so their willingness to increase gold holdings is not very high. Some central banks have even slightly reduced their gold holdings. Based on the relationship between global central bank gold purchases and gold prices, and under different assumptions, simple scenarios can be used to project potential gold prices. Preliminary results suggest that a correction during rapid upward trends is reasonable. However, it is important to note that real-world situations are far more complex than these assumptions, and theoretical projections are only one perspective.