For the first 40 years after President Nixon closed the gold window in 1971, central banks mostly unloaded their gold to exercise their faith in fiat money. In 2011, however, Congress passed the Budget Control Act of 2011, which raised the debt ceiling by $2.4 trillion through 2012. As a direct result of that move, Standard & Poor’s downgraded Treasury credit debt from AAA to AA+, the first time since the 1980s U.S. debt was rated below the top (AAA) rating.
That’s when the “new gold standard” began with central banks. From 2011 to 2021, net central bank buying averaged around 500 metric tons (16 million Troy ounces) per year. That pace doubled in the last five years, with over 1,000 tons of gold purchases added each year from 2022 to 2024, followed by 850 tons last year. Central banks bought more gold in four years than in the previous eight.
The main impetus for this big gold-buying binge since 2022 was the war in Ukraine, plus a strong spurt of new inflation after President Biden’s massive stimulus programs during a strong economy.
Where does the central bank gold-buying spree stand now?
Central-bank gold buying totaled about 345 metric tons in the first half of 2026, according to the World Gold Council (WGC).
Buying accelerated sharply in the second quarter, when central banks purchased 289 tons, up from about 57 tons in the first quarter. The WGC said central banks remain on course for another strong year of gold buying, although demand will likely be lower than in 2025.
For the first five months of 2026, China’s central bank bought $5.7 billion in gold, mostly in the second quarter, when gold prices were consolidating near $4,000. This constant flow of central bank buying is effectively putting a new floor under the price of gold.
Even though foreign central banks own almost $10 trillion in U.S. Treasuries, they own more in gold than in U.S. Treasury securities.
That, to me, looks like a new gold standard –better even than the last gold standard, as it reflects voluntary purchases in a free market, not fixed to currency values. This time, central banks are “voting” for gold over paper money.
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The reason gold has more than doubled since 2022 is simply supply and demand: The world’s gold mines produce about 3,600 tons of gold per year, almost entirely consumed privately, namely in demand for gold jewelry (about 2,000 tons), investment demand (1,180 tons a year), and industrial demand (325 tons).
Putting these numbers together, you’re talking 3,500 tons of established private sector demand per year vs. 3,600 tons from mines, so adding 500 to 1,000 tons of central bank demand each year puts gold’s overall supply-demand balance into a deficit situation, thereby pushing gold prices up to new highs.
Where is gold headed next?
The WGC’s annual survey of central banks in 2026 revealed nearly half (a record 45%) of all central banks plan to add more gold over the next year, and – even more shocking – nearly three of four (74%) of central banks expect to sell U.S. dollars in the coming year, and an astonishing 89% of central banks polled by WGC expect gold prices to rise in the next year.
Meanwhile, the dollar’s share of global foreign exchange reserves has fallen from 72% in 2000 to around 58% in 2025, while gold’s share of central bank reserves has risen to 24%, eclipsing U.S. Treasury bonds (23%), with T-bonds as a subset of dollar demand.
This is creating an unofficial (stealth) gold standard, as nations swap dollars for gold.
Nearly all currencies (all but the Swiss franc, it seems) are staging a “race to the bottom” to gain trade advantages, so central bankers have woken up to the fact that gold remains the gold standard for money.
Given that backdrop, it could be a very good time to own gold stocks in portfolios.
Here are two gold stocks that are on my BUY list:
Kinross Gold Corporation(KGC), which my stock grading system rates as a C.
Idaho Strategic Resources Inc (IDR),which my stock grading system rates as a C.
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