Why Are Central Banks Buying Gold at Record Levels Since 2022?

Why the World's Largest Institutions Are Rushing Into Gold

There is one thing that should catch your attention as an investor: what large institutions do when they think no one is watching. In 2022, central banks worldwide bought 1,136 tonnes of gold, the highest level recorded since 1967. In 2023, they added 1,037 tonnes more.

This is not speculation. These are institutions whose mandate is long-term monetary stability. If they are buying gold at this pace, they see something. The question is: what?

The Anecdote: The 1971 "Nixon Shock"

To understand why central banks are turning back to gold, we need to go back to August 15, 1971.

That evening, Richard Nixon appeared on American television to announce a decision that would change the global monetary system: the United States was abandoning the convertibility of the dollar into gold. The gold standard was over. The dollar became a fiat currency, its value now resting solely on confidence in the U.S. government.

Since that day, countries around the world have faced a structural challenge: how to store value over the long term when the main reserve asset, the dollar, can be printed at will? For decades, the answer seemed simple: "Buy U.S. Treasury bonds." But since 2022, that answer is increasingly uncertain.

The "Nixon Shock" created a system where everyone depends on the dollar. And that is precisely what is pushing central banks to hedge massively with gold.

The Historical Fact: Records That Don't Lie

The World Gold Council publishes official central bank purchase data every quarter. What these figures show is unambiguous:

What is striking is *who* is buying. It is not the United States or Western Europe, which already hold significant reserves. It is primarily emerging economies, countries actively seeking to reduce their dependence on the U.S. dollar.

The People's Bank of China increased its official gold reserves by approximately 15% between 2022 and 2025. The true figures are likely higher, as China has historically under-reported purchases for several years before eventually disclosing them.

The Concept: De-dollarization

The massive gold purchases by central banks are inseparable from a phenomenon called de-dollarization, the slow but real process by which several countries are seeking to reduce their reliance on the U.S. dollar in trade and reserves.

Three reasons explain this trend:

Reason 1, The freezing of Russian reserves in 2022. When the West froze approximately $300 billion of Russian foreign exchange reserves following the invasion of Ukraine, a powerful signal was sent to every country: holding reserves in dollars means being exposed to a U.S. political decision. Gold cannot be frozen by decree.

Reason 2, The U.S. debt trajectory. The United States now carries federal debt exceeding $35 trillion, growing faster than GDP. For foreign central banks holding Treasuries, this trajectory raises questions about the long-term quality of their primary reserve asset.

Reason 3, Gold cannot default. Gold is not a claim on a government. There is no counterparty that can fail to meet its obligations. In a world where institutional confidence is eroding, this attribute is regaining value.

Gold is not a "barbarous relic" as Keynes once called it. It is insurance against government incompetence, and that insurance is being massively repurchased by the world's most cautious institutions.

What This Means for You as a Retail Investor

Gold is not an investment in the traditional sense, it pays no dividends and does not grow like a business. But it plays a specific role in a well-built portfolio: hedging against monetary debasement and systemic crises.

What central banks have been doing since 2022 is exactly what the defensive portion of a serious portfolio should do: hedge against extreme scenarios that, precisely, happen more often than models predict.

For individual investors, several approaches exist: physically-backed gold ETFs (such as Invesco Physical Gold ETC), coins and bars for direct ownership, or a small exposure through gold mining ETFs for those seeking more leverage. Each approach has its own advantages and tax implications.

At Axone Capital, we do not say "buy gold now" without context. But we do say this: if the world's most conservative institutions are increasing their gold exposure to record levels, it is a macro signal that deserves your attention.

The Macro · Technique · Mindset method always begins with reading the major institutional players. And the major players right now are speaking clearly through their purchases. Learning to read that language is one of the most valuable skills a retail investor can develop.