The central bank gold buying spree has accelerated.
May 5 (King World News) – The Kobeissi Letter: BREAKING: Global central bank gold purchases surged +36 tonnes in Q1 2026, to 244 tonnes, the highest since Q4 2024.
This significantly exceeds the 5-year average of ~228 tonnes.
By comparison, the 5-year average in 2016-2020 was ~115 tonnes, or less than half the current level.
Central banks have now bought over +200 tonnes of gold in 10 out of the last 11 quarters.
Poland led Q1 purchases at +31 tonnes, bringing its total reserves to a record 582 tonnes, heading closer to its 700 tonnes target.
Uzbekistan followed at +25 tonnes and China at +7 tonnes.
World central banks are acquiring gold at an accelerated pace.
Global Bond Yields & Gold
Peter Boockvar: I think more attention than is being paid should be on rising global bond yields. The Reserve Bank of Australia raised rates again by 25 bps as expected to 4.35%. That now takes back all of their cuts that they started to implement in February 2025 after the aggressive hiking seen in 2022 and 2023.
Governor Bullock said “One reason to increase interest rates was to give ourselves space now to sit and see what happens. We feel we’re now in a position where we’ve got space, to be alert now to both sides of the risks to inflation – upside and downside.” After this hike, they are most likely on hold for now and Aussie yields were little changed in response. The Aussie$ is just off a 4 yr high vs the US dollar, also benefiting from being considered a commodity currency.
Also last night, Senior Deputy Governor of the Bank of Korea said “It’s time to consider stopping rate cuts, and thinking about increases.” As mentioned yesterday too, an ECB member said it’s inevitable that rates will rise in June but we’ll have to see on that.
The 10 yr UK gilt yield is jumping by 12 bps to 5.08%, a fresh 18 year high.
To the question I get often, when will stocks care about rising rates. I of course can only guess and I’d say if we got above 4.50% in the 10 yr yield, which I think is going to happen with an eventual retest of 5%.
Gold
Gold continues to digest the big move seen in 2025 and early 2026 but the secular trend of central bank buying remains intact as I mentioned last week with the fresh Q1 World Gold Council data. H/t too to my friend David Rosenberg for this quote seen over the past few days from the Governor of the National Bank of Poland who has been a major buyer of gold over the past few years:
“Recent market developments, driven by the instability in the Middle East, have reinforced our view that instability has become the defining feature of the global economy. I would reiterate the importance of diversifying foreign reserves and the role of gold as a strategic asset.” We remain long physical bullion and the miners.
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