Central banks around the world increased their gold reserves by 53 tonnes in October, the biggest rise since November 2024. This is a 36% increase compared to September, bringing total purchases for the year up to 254 tonnes. Poland and Brazil are the main contributors to this boost, while Russia decreased its holdings by 3 tonnes despite rising global demand. Poland added 16 tonnes to its gold reserves in October, reaching a total of 531 tonnes, which is 26% of its overall reserves. Brazil also increased its holdings by 16 tonnes, bringing its total to 161 tonnes, making up 6% of its reserves.

China’s Ongoing Gold Accumulation

China has continued to acquire gold for 12 months straight, adding 0.9 tonnes last month and raising its total to 2,304 tonnes. This trend occurs as gold prices rise, which has reduced overall demand compared to the last three years. However, central banks are still committed to building their gold reserves and are actively purchasing across various countries. The significant 53-tonne increase in gold purchases by global central banks in October is a very positive sign. This strong accumulation of hard assets, the highest since November 2024, indicates a desire to reduce reliance on the dollar and protect against ongoing inflation. For derivative traders, this activity supports gold prices as we approach the year’s end. This central bank activity likely helped gold prices rise through November, where they tested the $2,400 per ounce level before settling down. Recent data shows that the US CPI for November 2025 exceeded expectations at 3.5%, which strengthens the case for investing in inflation-hedging assets. This trend is now visible in derivatives markets, with interest in February 2026 gold call options increasing by 8% in just the last two weeks.

Gold Market Trends

With the recent price stabilization, implied volatility has slightly decreased, making options strategies more appealing. Traders are increasingly using bull call spreads to aim for a move toward the $2,450 strike price while limiting risk. This approach allows them to benefit from potential price increases driven by more institutional buying, without full exposure to a possible short-term drop. This pattern mirrors what we saw in 2023 when record purchases by central banks led to a multi-month rally in gold prices. Back then, consistent buying from entities like China’s People’s Bank provided a strong foundation for the market, absorbing any downturns. The ongoing purchases from countries like Poland and Brazil suggest a similar dynamic is emerging. Though Poland and Brazil’s buying is aggressive, it’s important to pay attention to the details of the trend. For example, China’s purchases slowed to just 0.9 tonnes in October, the smallest addition in a year. This requires careful observation, as a significant decline in Chinese demand could affect overall market mood. Russia’s small sale of 3 tonnes is relatively insignificant compared to the large global buying trend. Therefore, we should view any price dips in the coming weeks as potential buying opportunities rather than signs of weakness. Selling cash-secured puts at strike prices below the current market, like around the $2,325 level, could be a smart strategy to gain long exposure at a better price or simply earn premium income. Create your live VT Markets account and start trading now.

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