Central bankers at the London Bullion Market Association's annual conference in Sorrento, Italy, said gold remains a core reserve asset even though this year's surge in bond yields has undercut its usual edge. Prices are down around 4% in 2026 but have stayed above $4,000, supported by central-bank buying and safe-haven demand.
This year, US Treasury yields have jumped to multi-decade peaks while gold prices are down around 4%, a combination that would normally pressure the metal further. Even so, prices have stayed above $4,000, supported by central-bank buying and safe-haven demand, according to analysts.
Sergio Nicoletti Altimari, deputy governor of the Bank of Italy, told the conference gold is a safe haven asset proven by its performance across crises. According to Reuters: "Gold is a safe haven asset, probably the safe haven asset".
Bundesbank flags bonds' rising appeal
Bundesbank President Joachim Nagel, by contrast, said rising yields are increasing the relative attractiveness of bonds among reserve asset managers. He added, however, that the case for diversifying into gold remains significant given continued geopolitical stress and the credit risk tied to high debt levels.
Central-bank buying set to slow, but stay elevated
Gold demand from central banks is expected to slow 15% year-on-year to 720 metric tons in 2026, according to consultancy Metals Focus's June forecast, though that would still hold above pre-2022 levels. Altimari said the gold market has undergone a structural shift since 2022, driven by central-bank purchases in emerging economies. Demand has also been supported by concerns over high public debt and fiscal expansion, which he said has weakened gold's traditional inverse relationship with real bond yields.
China's buyers pivot from jewellery to bars
Shanghai Gold Exchange vice president Zeng Hui told the conference the gold market has seen profound shifts in its demand structure and pricing framework in recent years. In China, the top gold consumer, bar-and-coin purchases surpassed jewellery consumption for the first time in 2025, as the market is increasingly driven by investment demand and institutional investors.
Source: Commodities & Futures News
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