Gold Prices Rise on Increased Purchases by Central Banks

Gold prices have been soaring in recent times. The primary reason for this surge is the sharp rise in international markets, where the price of pure gold has reached USD 4,379 per ounce. At the same time, in the domestic market, the price of 10 grams of gold has climbed to ₹1.32 lakh. Understanding the factors driving this continuous increase in gold prices has become essential for every consumer.

While the festive season is one contributing factor to the rise in gold prices in India, the main reason is the large-scale purchase of gold by central banks across the world. In September 2025 alone, central banks of various countries collectively bought as much as 39,000 kilograms, or 39 tonnes, of gold. This was revealed in a report released by the World Gold Council (WGC). The WGC noted that this was the highest level of gold purchases by central banks in a single month so far this year. Overall, central banks have purchased a total of 634 tonnes of gold in 2025 up to now.

A country-wise breakdown of gold purchases in September shows that the Central Bank of Brazil topped the list with 15 tonnes, followed by the National Bank of Kazakhstan with 8 tonnes. The Bank of Guatemala purchased 6,000 kilograms, while the Central Bank of Russia bought 3 tonnes and Turkey acquired 2 tonnes of gold. In addition to central banks, commercial and interest-based banking institutions are also increasing their investments in gold, viewing it as a strong asset capable of delivering favorable returns in the future. This growing institutional demand, combined with other factors, is driving gold prices steadily higher at present.