Gold's Sovereign Buying Spree Reaches Historic Heights as Warsh's Fed Prepares Crucial Dot Plot
Published on 06/16/2026 at 17:54 | Redaktion boerse-global.de
The gold market is navigating a rare convergence of forces this week: a record-breaking surge in central bank demand for bullion and the first Federal Reserve policy meeting chaired by Kevin Warsh. With the yellow metal trading near $4,345 an ounce — roughly 23% below its January peak of $5,627 — investors are weighing long-term structural shifts against near-term monetary policy signals.
A survey from the World Gold Council has laid bare the scale of the sovereign pivot. Some 45% of reserve managers plan to expand their gold holdings over the next twelve months, the highest proportion ever recorded in the annual poll. An even larger share, 89%, expect global gold reserves to keep rising. The numbers carry historical weight: gold has overtaken US Treasuries as the world's largest reserve asset for the first time since 1996. At the end of 2025, bullion accounted for 27% of central bank reserves, up from 20% a year earlier, while the share of US government bonds slid from 25% to 22%.
This is no fleeting trend. Over the past four years, central banks have added an average of 1,000 tonnes of gold annually — double the yearly pace of the preceding decade. Poland alone purchased 14 tonnes in April, lifting its total to 595 tonnes or roughly 30% of its reserves. China added 8 tonnes in the same month, its largest monthly increase since December 2024. The World Gold Council survey points to geopolitical uncertainty as the primary driver, with nine out of ten central banks expecting the dollar's dominance in global reserves to erode within five years.
Against this backdrop, the Federal Open Market Committee begins its two-day meeting on Tuesday. Markets have priced in a 97% probability that the central bank will hold the federal funds rate at 3.50% to 3.75%, according to the CME FedWatch Tool. The real catalyst is the updated dot plot, the first to be issued under Warsh, who was confirmed as Fed chair on May 22 by a 54-45 Senate vote. Warsh has publicly questioned the usefulness of the dot plot, though institutional constraints limit how quickly he can reshape the format. If the median projection signals two rate hikes for 2026, the dollar could strengthen and stall gold's recovery. A neutral or dovish tilt would remove that headwind. Still, 70% of market participants expect at least one rate increase by December.
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On the geopolitical front, a US-Iranian peace agreement has injected fresh momentum into the gold rally. The deal, which reopens the Strait of Hormuz and is set to be signed in Switzerland on June 19, sent oil prices tumbling to a two-month low. That directly undercuts inflation pressure: US consumer prices rose to 4.2% in May, driven by a 23.5% surge in energy costs linked to the earlier conflict. Core inflation stood at 2.9%. With energy relief in sight, the urgency for the Fed to tighten further diminishes — a double tailwind for gold.
Technically, the precious metal enters the Fed decision with a relative strength index of 43.7, suggesting neutral to slightly oversold conditions. The 50-day moving average sits at $4,586, and whether gold can close that gap depends heavily on the tone from Washington. Despite a 28% year-on-year gain, bullion remains roughly 5% below where it traded a month ago.
Central bank buying figures underscore the complexity of this market. In the first quarter of 2026, net purchases totaled 244 tonnes, according to the World Gold Council, although only 16 tonnes of that were officially reported to the International Monetary Fund — a reminder that much sovereign buying goes unrecorded. Turkey sold 60 tonnes in March alone, but April saw net global purchases rise by another 17 tonnes, led by Poland and China.
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All eyes are now on Wednesday’s Fed press conference. The dot plot will either confirm the bullish narrative of structural gold demand or inject a dose of dollar strength that tests the metal's recent recovery.
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