The current market dynamic sees Western investors liquidating positions in response to hawkish Federal Reserve policies, while central banks in the East capitalize on price dips. Schroders analysts note that the People’s Bank of China (PBOC) has significantly ramped up its accumulation, with purchases jumping from 2 tonnes in February to 15 tonnes in June. Given that gold currently accounts for only 8.3% of China’s total reserves, reaching a 30% benchmark would require consistent monthly buying for decades, indicating an exceptionally long runway for demand.

Poland’s National Bank serves as another bellwether for this trend. Having become a major buyer following the 2022 invasion of Ukraine, Poland is expected to continue its accumulation even after hitting its 700-tonne target. Schroders suggests that this behavior reflects a broader shift among emerging market central banks to hedge against geopolitical instability. Underlying these moves is the theory of fiscal dominance, where the sheer scale of U.S. debt issuance and interest expenses limits the Fed’s ability to aggressively raise rates, ultimately supporting the long-term case for gold as a reserve asset.