Central banks have emerged as a vital force in the gold market, significantly bolstering demand. According to the World Gold Council, these financial institutions acquired over 1,000 metric tonnes of gold in 2025, marking one of the strongest multi-year periods of gold accumulation on record. This activity is particularly pronounced among reserve managers in emerging markets, who are increasingly diversifying away from dollar-heavy portfolios. Citing ongoing economic uncertainty and rising fiscal deficits, these managers are turning to gold as a more stable asset.
In addition to central bank purchases, the gold market is seeing renewed interest from exchange-traded funds (ETFs). After experiencing outflows late last year, gold ETFs began to record inflows at the start of 2026, signaling a positive shift in market sentiment and continued optimism for gold investments.
Silver is also benefiting from two distinct phenomena. It has largely reflected gold’s performance but is receiving an additional boost due to its extensive industrial applications. The Silver Institute forecasts that global demand for silver is set to exceed 1.2 billion ounces this year, with significant contributions from burgeoning renewable energy sectors and electronics manufacturing.
On the supply side, new mine production is expected to remain tightly constrained, with few new mines coming online. Yield levels have been persistently low, compounding uncertainty in the markets. This lack of supply amid steady demand underscores silver’s growing attractiveness as an investment choice as economic landscapes continue to evolve.
As these developments unfold, gold (XAU/USD) has recently reclaimed the $5,141 Fibonacci level, with bullish traders now setting their sights on a new target of $5,303. The combined dynamics of central bank purchases, ETF inflows, industrial demand, and constrained supply are contributing to a reinforcing cycle of confidence in these precious metals.
