(Kitco News) - Central bank demand has provided key support for gold throughout its unprecedented rally, and while official purchases have slowed in recent months as nations contend with growing inflationary pressures and a global energy crisis, demand has not disappeared.
Not only are some central banks, such as China's, tactically buying gold as prices have corrected since March, but new players continue to enter the market.
On Wednesday, the National Bank of Georgia (NBG) announced that it had purchased $100 million worth of physical gold.
“Following this acquisition, the share of monetary gold in the NBG's international reserves will reach 15.5%. The upward trend of the international reserves is particularly noteworthy; as a result, total reserves have reached a historical high of USD 7.0 billion, with their volume amounting to 114.8% of the International Monetary Fund's Assessing Reserve Adequacy (ARA) metric,” the central bank said in a statement.
According to data from the World Gold Council, this is the first time Georgia has increased its gold reserves since March and April 2024, when it purchased 4.7 and 2.5 tonnes, respectively.
The NBG said that these gold purchases are part of its long-term international reserve management strategy. The central bank added that it is diversifying its official reserves to hedge against geopolitical and inflationary risks.
The bank noted that it expects official-sector demand to continue supporting the gold market.
“Importantly, central bank demand exhibits low price sensitivity, which primarily supports the stability of the gold price floor. The ongoing conflict in Ukraine, escalating tensions in the Middle East, U.S.-China trade frictions, and the U.S.-Iran conflict that commenced in February 2026 have collectively reinforced a structural risk premium in gold pricing, enhancing its enduring value as a safe-haven asset,” the central bank said.
