CICC: Do not overestimate the motivation of global central banks to buy gold

The report from the China Gold Research Institute pointed out that since 2025, the price of gold has been rising steadily. One common observation is that central banks around the world have been buying gold in large quantities as a hedge. However, after the outbreak of conflicts in the Middle East, the volatility of gold prices has significantly increased. In fact, there are many factors that affect the price of gold, but the global trend towards de-financialization in recent years has pushed up the prices of tangible assets, including gold. Under the new macroeconomic paradigm, traditional gold pricing frameworks are also facing challenges. The correlation between global central bank gold purchases and gold prices has also increased, but data shows that in recent years, it is mainly emerging markets and developing countries that have increased their gold reserves, especially non-floating exchange rate economies. Developed country central banks, on the other hand, have stable foreign exchange reserves and do not show a significant willingness to increase their gold holdings, with a few central banks even showing a slight reduction in gold holdings. Based on the relationship between global central bank gold purchases and gold prices, and according to different assumptions, the price of gold in various scenarios can be deduced. Preliminary results show that a correction in the case of a rapid rise is reasonable. However, it is important to note that reality is much more complex than assumptions, and theoretical deductions are just one perspective.