According to the World Gold Council, central banks that have been absent from the market for a long time are expected to resume buying gold this year, as the metal's role in hedging against de-dollarization and geopolitical risks becomes more prominent. Gold prices hit a record high near $5,600 per ounce at the end of January but have since plunged by over $1,000 this month, with the latest trading price around $4,340. Historically, such declines have partly been attributed to margin-related selling. During the gold sell-off in October last year, central banks made significant purchases, but it is still too early to determine whether the recent drop will trigger a similar response. Demand for gold from central banks may decline, as rising prices not only deter new purchases but also increase the proportion of existing gold reserves in total reserves. In recent months, central banks in Guatemala, Indonesia, and Malaysia have bought gold, with some returning to the market after a long hiatus and others making their first-ever purchases. A trend has been observed in which new or previously inactive central banks are entering the gold market, a development expected to continue into 2026. Some central banks are also purchasing gold from small-scale local producers to support domestic industries and prevent the metal from falling into the wrong hands. In January, the World Gold Council projected that record-high gold prices would slow central bank purchases from 863 tonnes in 2025 to 850 tonnes this year, though demand remains high compared to pre-2022 levels. Central bank purchases accounted for approximately 17% of global gold demand last year.