Happy Sunday, GoldBuzzers!

While Gold and Silver continue their consolidation, most of the headlines I saw this week were all about inflation and the Fed.

Today’s Deep Dive looks past those headlines to something that doesn’t change with each inflation print: a growing share of the world’s newly mined gold is being locked away before it ever reaches the market and is never coming back. That goes a long way to explaining why the floor held.

Ok. Let’s get into it. ⬇️

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Gold finished Friday little changed near $4,165 an ounce, and silver held its ground around $57, with both metals finding their footing after a bumpy week. The support came from an unlikely friend: the stock market.

A selloff in technology shares, Wall Street’s worst week since June, sent investors hunting for safer places to park their money, and that rush into government bonds dragged the 10-year Treasury yield down to about 5.1 percent, its biggest weekly drop since February.

Falling yields matter for gold and silver because neither pays interest, so they look more attractive when bonds pay less. The Middle East added its own layer of worry, with a Singapore-flagged container ship sunk by an Iranian projectile in the Strait of Hormuz and fighting between Saudi Arabia and Yemen’s Iran-backed Houthis escalating, all of which pushed Brent crude above $110 a barrel.

As for the Fed, markets now see about an 85 percent chance rates stay put at this month’s meeting, but with inflation running hot, the odds of another hike in December sit near 90 percent.

On 7 October, China’s central bank reported that it had bought 740,000 ounces of gold in September. That’s 23 tonnes, the largest monthly purchase since September 2023 and the 23rd month in a row it has added to its reserves.

The timing is what makes it really interesting. Gold fell more than 6 percent in September. Despite that, the People’s Bank of China bought more last month than in any month since the current run of purchases began in November 2024, and more than in the whole of 2025, when it added just 27 tonnes across twelve months. July and August were the two biggest months before that.

The pattern on this chart is hard to ignore. Through 2025, as the price ran from $2,600 to a record above $5,000, China’s purchases shrank to under a tonne a month. From March this year, as the price fell, they grew every month. Whatever the reasoning behind it, the effect is a buyer who shows up with more money the cheaper gold gets.

Official holdings now stand at a record 2,410 tonnes, and 2026’s reported purchases have reached 103 tonnes. Even those figures may understate it. Société Générale estimated last October, by comparing imports and domestic production against reported reserves, that Beijing’s real purchases could be ten times the official number.

The gold that was never for sale

Here’s the piece of the China story that rarely gets mentioned. China is the world’s largest gold producer, digging up around 380 tonnes a year, roughly a tenth of global output. None of it leaves China.

Exports of gold bullion from mainland China are prohibited. That isn’t a new rule or a reaction to current events; it has been the law for years. So before the central bank buys a single ounce on the open market, a tenth of the world’s mined gold has already been taken out of circulation, every year, by the country that mines it.

The producers copying the model

Other gold-producing countries have noticed, and the idea of keeping your own gold at home is spreading.

Indonesia, which has the world’s fourth-largest unmined reserves, is bringing in an export tax of between 7.5 and 15 percent on gold shipments, with the higher rate on raw gold and the lower rate on finished bars. A finance ministry official told parliament that Indonesian investors had found it hard to buy gold bars during the boom, and that the government wanted more gold to stay in the country.

In Africa the central banks are buying directly from their own mines. Ghana has expanded the share of local production its central bank purchases. Tanzania requires around 20 percent of gold output to be sold to its central bank, which had accumulated 27.5 tonnes by June. Uganda launched a pilot program in April.

This isn’t a handful of outliers either. In the World Gold Council’s survey of 76 central banks this summer, half of those planning to buy gold said they’d do it through a domestic purchase program in local currency, and a record 45 percent expect to increase their own holdings over the next year.

The arithmetic

The world mined a record 3,672 tonnes of gold in 2025. The World Gold Council points out that mine output has grown by less than 1 percent a year over the past decade and expects that to stay around that level.

Central banks have bought an average of 1,000 tonnes a year for four years running. Add China’s 380 tonnes that can’t be exported, allow for some overlap between the two, and roughly a third of each year’s new supply is spoken for before jewelers, investors or ETFs get a look at it.

Gold bought by a central bank in Beijing, Accra or Jakarta doesn’t come back out when the Fed sounds hawkish. It just sits in a vault, usually for decades. Each year it happens, the pool of metal that actually trades, the pool whose price you see on the scoreboard, gets a little smaller relative to the demand chasing it.

Why this matters for the floor

Two weeks ago I wrote about hedge funds selling gold while long-term holders kept buying. This is the other half of that picture. The sellers in a pullback like this one are leveraged traders who have to sell. The buyers include governments who buy more as the price falls and never sell at all.

That combination is why a week of hot inflation data could knock gold down to $4,100 but couldn’t keep it there. The supply of gold available to the people who set the price is shrinking, year after year, while the buyers who are least sensitive to price are taking a growing share.

That’s the consolidation phase of a bull market with years still to run, and as September’s data shows, the biggest buyer is using the dip to buy more.

That’s all for this Sunday, folks. I’ll see you on Tuesday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com