China, India, Poland, Turkey and over 20 other central banks bought a combined 1,037 tonnes of gold in 2023 — near all-time records. Their motive: reduce dependence on the US dollar in their reserve portfolios after seeing Russia's dollar assets frozen in 2022.

When a central bank buys gold, it is a long-term vote of confidence in gold as a store of value that no single government can freeze or confiscate. This structural demand creates a persistent floor under the gold price regardless of short-term market moves.

The dollar's share of global reserves has fallen from 73% in 2000 to approximately 58% today. As countries diversify away from dollar assets, gold is the primary beneficiary — it has no counterparty risk and no issuing country that can impose sanctions.

This is not a crisis — it is a slow, multi-decade structural shift. Each percentage point that moves away from the dollar has to go somewhere, and gold is increasingly that destination. The trend is unlikely to reverse.

Active conflicts in Ukraine and the Middle East, rising US-China tensions over Taiwan, and an unstable geopolitical environment keep risk elevated. Gold historically spikes during crises and tends to hold those gains even after tensions cool.

The GPR Index (a measure of geopolitical risk based on newspaper coverage) is running above 150, which historically correlates with elevated safe-haven demand for gold. Even partial de-escalation tends to leave a lasting risk premium in the gold price.

Global gold mine production has been roughly flat since 2018 at around 3,600 tonnes per year, despite significantly higher prices. New large deposits are harder to find, permitting timelines have lengthened, and energy costs for mining operations have risen substantially.

Flat supply means that any increase in demand — from central banks, ETF investors, or jewelry buyers — cannot be quickly offset by new production. This supply constraint acts as a structural support for prices over the medium term.