Central banks' interest in gold is on the rise again.
According to the World Gold Council's (WGC) latest report, central bank gold purchases recovered in August 2025, with a global net increase of approximately 15 tonnes.
The largest buyers were Kazakhstan, China, and Poland. In particular, Poland's decision to increase gold's share of its foreign exchange reserves to 30 percent demonstrates that gold maintains its position as a strategic and reliable asset even in the current economic environment.
But what does this development reveal about the world economy, and what does it mean for the Finnish investor?
Central bank gold purchases are returning to growth.
The World Gold Council’s report shows that central banks continued to increase their gold reserves in August after a calmer period in July. This is not an isolated exception, but part of a long-standing trend where gold has strengthened its role as a foundation for foreign exchange reserves and risk management.
The People's Bank of China, in particular, has been an active buyer of gold for over a year, and Poland has also emerged as one of Europe's most prominent players.
These moves indicate, above all, that central banks are seeking to strengthen economic stability and independence in a situation where geopolitical uncertainty is increasing.
Kimmo Korkiakoski, CEO of Jalonom, identifies two key reasons behind this: regulatory changes and geopolitical risks.
"In Asia, there has long been a desire to move away from dollar dependency. Now there is a new catalyst: gold has been classified as a Tier 1 asset, which means it holds the same status on the balance sheet as cash. Previously, only 50 percent of the value could be recorded on the balance sheet; now, the full value can. This change is significant and gives central banks more leeway to increase their gold holdings," Korkiakoski explains.
Why are central banks adding gold to their reserves?
Central bank gold purchases are not random. They reflect an effort to diversify risk and protect against uncertainty in the currency markets.
Gold provides security that no digital currency or bond can fully replace. It is an asset that does not depend on another party's solvency.
"Gold is in the same risk class as government bonds, but it has no counterparty risk. This makes it attractive especially now, when the interest rate markets are uncertain and confidence in fiat currencies is wavering," Korkiakoski states.
Central banks, such as those in China, Turkey, and Poland, have added gold as part of their strategy to reduce dollar dependency and strengthen national autonomy. At the same time, gold serves as a symbol of trust for both international markets and the country's own population.
What does the behavior of central banks tell us about the markets?
When central banks increase their gold reserves, it is often a sign of preparation and growing uncertainty.
Behind the purchases in August are changes in interest rate levels, geopolitical tensions, and concerns about the persistence of inflation.
"The role of gold is emphasized whenever investors' confidence in the financial system weakens. Central bank actions often serve as a proactive signal: they seek safety before instability becomes more broadly visible in the markets," Korkiakoski says.
He emphasizes, however, that for the private investor, this is not a warning sign but an opportunity to learn about long-term preparedness.
"What does this tell the Finnish investor?"
"While the movements of central banks occur on a global level, they also have a direct ripple effect on the private investor. When the world's largest economies increase their gold holdings, the message is clear: preservation of value and diversification are once again at the core of investing."
"In Finland, interest in physical gold has grown steadily in recent years."
Fluctuations in interest rates and inflation, uncertainty in the stock and real estate markets, and the need for tangible assets have brought gold back into the conversation.
"In Germany, approximately 37 percent of the population has invested in physical gold. In Finland, the figures are still small, but interest is growing rapidly. Many people want their wealth to be literally in their own hands, not just as a digital value," Korkiakoski says.
Long-term significance – gold as part of a new reserve order
Countries such as China, Turkey, and Poland do not act on a whim. They are systematically building their own monetary policy safety net.
Many analysts believe that the global economy is moving toward a multipolar reserve system, where several stores of value emerge alongside the dollar. Gold is the most central among them.
"We are not seeing a rapid change, but the direction is clear. Gold is a strategic pillar for more and more central banks. Regulatory changes and geopolitical risks have made it important once again at the institutional level as well," Korkiakoski assesses.
What should the Finnish investor understand from this?
Central bank actions do not mean that the private investor should react quickly. However, they offer a valuable lesson in long-term preparedness.
"The question that everyone should ask themselves is this: should we act just like the central banks? When they strengthen their positions with gold, is there a reason for us to learn from this as well?", Korkiakoski reflects.
Gold remains one of the few assets that retains its value regardless of economic cycles and fluctuations in exchange rates. It serves as a measure of trust and stability—qualities that are increasingly valued in the current global situation.
Summary
The recovery in gold purchases by central banks tells us, above all, one thing: confidence in physical gold strengthens when the rest of the world falters.
When the largest economies seek safety in gold, the private investor should take the message seriously. Physical gold remains a store of value and a safe haven whose significance grows in an era of uncertainty, interest rates, and inflation – both globally and in Finland.
Frequently Asked Questions: Central Banks and Gold
1. Why do central banks buy gold?
Central banks buy gold to strengthen financial stability and diversify risk. Gold serves as a reserve whose value does not depend on the currencies or debt obligations of other countries. Additionally, it increases confidence in the country's economy and acts as a hedge against fluctuations in exchange rates and inflation.
2. What is the Tier 1 classification and why is it significant for gold?
The regulatory change that took effect in 2025 elevated gold to the Tier 1 asset class in banking regulation. This means that gold is now equated with cash, and its full value can be recorded on central bank balance sheets. Previously, only 50 percent of gold's value was taken into account. This change has increased the attractiveness of gold among central banks and institutional investors.
3. What do central bank gold purchases reveal about the global economy?
The increasing gold purchases by central banks primarily signal uncertainty and preparedness. As economic outlooks weaken, interest rates fluctuate, and geopolitical tensions rise, gold is viewed as a safe-haven asset. It signals to the markets that institutions are seeking a more stable store of value.
4. Why is this development significant for a Finnish investor?
Central bank actions reflect a global shift toward wealth protection and diversification. For a Finnish investor, this also serves as a reminder that physical gold can function as an essential component of a balanced and long-term investment portfolio. It is not merely a safe haven, but also a means of preserving purchasing power during times of inflation and market volatility.
5. Should a private investor act like central banks?
Central bank gold acquisitions are not a direct investment recommendation, but they provide a valuable example of risk management. As Kimmo Korkiakoski, CEO of Jalonom, states, every investor should ask themselves: should one's own wealth be protected in the same way that the world's largest economies do? Regular, planned gold purchasing is a practical way to answer this question.
