Central banks around the world have added a staggering 3,16,000 kg of gold over the past year, driving the yellow metal’s price up by 63%, according to Sujit Bangar, founder of taxbuddy.com. In a LinkedIn post, Bangar described this surge not merely as a market rally but as “a warning signal,” adding it’s a “red alert that the global order may be fracturing at its core.”
Bangar pointed out that while gold has always been a safe-haven option. However, the speed and scale of the current accumulation are unprecedented. “Every major crisis leaves a milestone,” he said, citing past events such as the 2008 global financial crisis, the Covid-19 pandemic and recent trade wars. Unlike previous crises, where fear drove investors to dollars and US Treasuries, today “fear = buy gold,” he said.
This shift is being driven by declining confidence in fiat currencies. The US dollar, for instance, recently recorded its largest six-month fall in 50 years, prompting what investors term “The Debasement Trade.” Explaining this, Bangar said, “When confidence in central banks and governments erodes, you move to assets with no counterparty risk… No default risk, no policy bias, no printing press. That’s gold.”
Central banks themselves are now leading the charge. Once net sellers in the 2000s, nations such as China, India and Russia have become the largest buyers of the precious metal. For these BRICS countries, gold is a strategic tool to reduce dependence on the dollar rather than a mere hedge, Bangar said. The 2022 freezing of Russia’s central bank assets acted as a wake-up call, highlighting how dollar reserves can be weaponised.
Bangar added that silver and platinum are benefiting from industrial demand and green-tech applications, but their price movements also reflect wider market anxiety. Over the past year, gold’s share of total central bank reserves has increased sharply in key economies, said Bangar. In Russia, from 29.5% to 35.8%, China from 4.9% to 6.7%, India from 9.6% to 13.1% and the UK from 13.5% to 16.6%.
Political factors are reinforcing the trend. Pressure on the Federal Reserve to cut rates, coupled with tariffs driving inflation, has created what Bangar calls a “heads I win, tails you lose” scenario for gold. He highlighted that this rally is about more than price. “For decades, the dollar = anchor of global finance. Now, trade conflicts + sanctions + tariff wars = cracks in that anchor. Gold = trust without a signature.”
Bangar concluded that gold’s ascent reflects fear, faith and fragility, rather than greed. As long as central banks continue to expand reserves, real yields remain low, geopolitical risks persist and countries diversify away from the US dollar, the precious metal is likely to retain its appeal. “Every tonne bought is a vote against uncertainty. And until trust returns to currencies, gold will keep shining,” he said.
Gold has seen a spectacular rise in recent months. On Thursday, Oct. 23, MCX gold rates rose amid reports of a potential India-US trade deal expected in the coming days or weeks. As of 12:10 p.m., MCX December futures for gold were trading 1.58% higher at Rs 1,23,783 per 10 grams, after touching a day’s high of Rs 1,24,233 earlier.