Recently, central banks’ gold purchases hit a 50-year high, drawing widespread market attention. The data show that central banks around the world purchased approximately 730 tonnes of gold in the first three quarters of 2023, an increase of about 40% year over year. Behind this figure lie changes in the global economic landscape and monetary policies. First, in terms of inflation, CPI has continued to rise in major global economies, particularly in the United States and the eurozone, where CPI growth has exceeded 2%. In a high-inflation environment, gold’s value-preserving function as a traditional safe-haven asset stands out, attracting central banks seeking to increase their holdings. Second, in terms of interest rates, major central banks such as the Federal Reserve and the European Central Bank have raised rates while tackling inflationary pressures. In a high-interest-rate environment, gold becomes more attractive because it is usually associated with a low-interest-rate environment. In addition, ETF inflows and on-chain data show that global gold ETF holdings have continued to increase, indicating growing investor confidence in gold. Meanwhile, the volatility of cryptocurrencies such as Bitcoin has also prompted some investors to shift their funds into the gold market. In summary, the main reasons central banks are increasing their gold holdings are: first, to respond to a high-inflation environment; second, to respond to a high-interest-rate environment; and third, growing investor confidence in gold

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