The central bank is aggressively buying gold, and the USD to gold exchange rate hits a new high! Will gold prices rise again in 2026?

Central Banks Compete to Increase Gold Reserves, De-dollarization Accelerates

Global central banks have launched an unprecedented wave of gold purchases. According to the latest statistics from the World Gold Council, by October this year, central banks worldwide have net purchased a total of 254 tons of gold in just ten months, with a single month in October reaching 53 tons, a 36% month-over-month increase. This surge in gold buying reflects how central banks are accelerating their adjustment of foreign exchange reserve structures amid economic uncertainties.

Poland leads the world with a purchase volume of 83 tons, followed by Kazakhstan and Azerbaijan. Notably, Brazil has restarted its gold purchase program after four years, accumulating 31 tons of gold in just two months, which market analysts interpret as a clear signal of a strategic shift in monetary policy. Krishan Gopaul, senior researcher at the WGC, pointed out that these actions by central banks are not short-term speculation but part of long-term strategic planning, aiming to hedge against dollar risks and diversify reserves through gold.

USD to Gold Hits Record Highs, Geopolitical and Trade Frictions Fuel the Rise

Supported by continuous central bank purchases, international gold prices broke the $4,500 per ounce mark for the first time this Wednesday, setting a new record. Since the beginning of the year, gold prices have increased by over 70%, marking the strongest annual performance since the 1979 oil crisis. In Taiwan market terms, gold has risen from about NT$105,000 per two taels at the start of the year to NT$177,000 now, a remarkable increase.

Two main drivers are behind this rapid rise in gold prices. First, ongoing geopolitical turmoil, with conflicts in the Middle East and the Russia-Ukraine war, coupled with the U.S. government reintroducing “reciprocal tariffs,” have heightened global trade risks. Second, countries are accelerating restructuring their foreign exchange reserves, increasing gold holdings to reduce dependence on a single currency. The trend of USD to gold exchange rate vividly reflects this global monetary reshuffling.

Silver and Platinum Perform Even Better, Reshaping the Precious Metals Investment Landscape

In addition to gold, other precious metals are also surging. Silver broke through $70 per ounce for the first time this week, with an annual increase of over 150%, outperforming gold. Platinum also jumped 4% on the 24th, reaching over $2,300, with an annual gain approaching 160%. Due to the more aggressive rise in silver, discussions about “buying silver over gold” have emerged in the market.

However, Wenshi Hsu, Vice Chairman of the Taipei City Gold and Silver Jewelry Association, reminds investors that current gold prices are already high, and small-scale investments should be cautious. He pointed out that at current prices, even the smallest unit of gold requires several thousand New Taiwan dollars. For investors with limited budgets, it is recommended to prioritize investment products like gold bars and gold savings accounts rather than gold jewelry, to avoid high processing costs eroding potential returns.

Diverging Institutional Forecasts, Gold Price Range Could Be Threefold by 2026

Looking ahead, market opinions on the gold price trend in 2026 vary significantly. Goldman Sachs predicts that, supported by ongoing central bank purchases and the Fed’s expected rate cuts, gold could reach $4,900 by the end of the year. JPMorgan is more optimistic, estimating that central banks might buy up to 755 tons of gold, potentially pushing prices above $5,000. Well-known Wall Street analyst Ed Yardeni boldly forecasts that gold could soar to $6,000 by the end of 2026. In contrast, Citigroup adopts a conservative stance, suggesting that if geopolitical tensions ease, gold prices might retreat to around $3,000 by year-end.

The World Gold Council’s survey further confirms the long-term bullish outlook of central banks. Forty-three percent of surveyed central banks plan to continue increasing their gold holdings over the next 12 months, and 75% expect the share of USD in their foreign exchange reserves to decline further, with the importance of currencies like the euro and RMB rising accordingly.

Gradual Deployment Is Best, Risk Management Cannot Be Overlooked

For Taiwanese investors, while gold has hedging and inflation-hedging characteristics, current prices are already high, so cautious decision-making is essential. Financial experts recommend the following strategies:

• Use dollar-cost averaging to gradually enter the market, avoiding large one-time positions to mitigate short-term volatility risks.

• Diversify holdings to include other precious metals such as silver and platinum, but be aware that these tend to be more volatile than gold.

• Clearly distinguish between investment and consumption purposes. For investment, choose low-fee, highly liquid channels such as gold ETFs, savings accounts, or gold bars. Gold jewelry, due to its processing costs, has lower liquidity and is less suitable for pure investment.

The global economic landscape is accelerating its restructuring, and gold’s status as the “ultimate safe-haven asset” is increasingly solidified. Whether as national strategic reserves or individual asset allocations, this gold rally driven by geopolitical risks and currency reorganization still has considerable room for development.