Even Central Banks Have FOMO on Gold — Is It Still Safe to Buy Now?

For centuries, gold has symbolized wealth, power, and security. But in 2025, it’s doing more than shining—it’s dominating the conversation in global finance. Central banks worldwide have been buying gold at a record pace, pushing the metal’s price to historic highs and sparking what some analysts call a “central-bank FOMO” trend. With inflation pressures, geopolitical uncertainty, and weakening confidence in the U.S. dollar, the world’s biggest financial institutions are turning to the oldest store of value on Earth.

But for everyday investors, the real question is: is it still safe to buy gold now—or has the rally already gone too far?

Central Banks’ Gold Buying Spree

In recent quarters, central banks have emerged as the most influential buyers in the gold market, driving both sentiment and price momentum. According to the World Gold Council, global central-bank net purchases reached 244 tonnes in the first quarter of 2025, one of the strongest starts in over a decade. Countries such as China, India, Turkey, and Poland have been steadily adding to their reserves as part of a larger effort to diversify away from U.S. dollar assets.

Their motives are clear: gold offers a hedge against inflation, protection from currency volatility, and a buffer against geopolitical risk. Nearly 95% of surveyed central banks believe global gold reserves will rise over the next year—a sentiment that underscores just how institutionalized the metal’s comeback has become.

Gold Demand Overview — 2025 Snapshot

Why Central Banks Are Hoarding Gold

This wave of institutional buying isn’t just about chasing returns—it’s about reshaping global monetary strategy. As economic blocs evolve and geopolitical rivalries deepen, many nations want to reduce their exposure to the U.S. dollar, which still dominates international reserves. Gold, unlike fiat currency, isn’t subject to sanctions or devaluation through monetary policy.

China has been particularly active, quietly increasing its holdings for 18 consecutive months, while emerging markets in Asia and the Middle East have accelerated purchases to build stronger financial buffers. Analysts describe this as a structural shift rather than a short-term trading trend. It signals a new era where gold’s role as a neutral reserve asset is once again front and center.

For individual investors, this institutional demand provides a price floor—suggesting gold may stay supported even if retail enthusiasm fades temporarily.

Gold’s Macro Backdrop: Inflation, Dollar Weakness, and Uncertainty

Gold thrives when the world looks uncertain, and 2025 has provided the perfect storm. Persistent inflation, uneven growth, and fragile geopolitical conditions have fueled a global flight to safety. The U.S. dollar, which typically competes with gold as a safe-haven asset, has weakened amid expectations of rate cuts and slowing economic momentum.

These dynamics have propelled gold prices to near-record highs in multiple currencies. Analysts at HSBC and other major banks forecast the metal could approach $5,000 an ounce by 2026 if current trends continue. In this context, gold isn’t just a hedge—it’s becoming a core allocation for both institutional and retail portfolios.

However, investors should remember that such macro conditions can change quickly. If inflation eases and interest rates stabilize, some of the urgency driving gold’s rise could subside.

The Cautionary Side: High Prices and Reduced Safety Margin

While the fundamentals look strong, the valuation picture is less comforting. At around $3,900–$4,000 per ounce, gold is near all-time highs. Buying into strength always carries risk, especially when driven by emotion and momentum. Central-bank demand may slow if prices appear overextended, and profit-taking could trigger short-term pullbacks.

Moreover, unlike stocks or bonds, gold offers no yield or income. That means investors rely entirely on capital appreciation for returns. If economic optimism returns or the dollar strengthens, gold could underperform riskier assets.

For new buyers, a prudent approach would be gradual accumulation—buying small amounts on dips rather than committing a lump sum at peak levels. This strategy helps smooth out volatility while maintaining long-term exposure.

Gold vs. Other Asset Classes

From an allocation standpoint, gold continues to serve a distinct purpose: portfolio diversification and crisis protection. It often moves independently from equities and bonds, providing balance during market turbulence.

However, investors should compare it against other inflation-hedge options such as silver, real estate, and inflation-linked bonds. Silver tends to move with gold but has more industrial exposure, making it more volatile. Real estate can hedge inflation but lacks liquidity. Inflation-linked bonds provide yield but are sensitive to interest-rate shifts.

Gold remains unique in combining universal acceptance, liquidity, and historical trust. Yet, it shouldn’t dominate a portfolio—experts often recommend limiting exposure to 5–10% of total assets.

What Analysts Are Saying

Market strategists are divided about whether gold is “too hot” right now. Some see this rally as sustainable, backed by structural central-bank buying and long-term dollar diversification. Others warn of a short-term correction once speculative inflows taper off.

According to MarketWatch, even central banks themselves are experiencing “FOMO”—fear of missing out—as gold continues to break records. But as Investopedia notes, every parabolic move invites pullbacks. Bank of America analysts recently suggested “entry points are coming,” implying that waiting for a correction might offer better value.

In short, while the trend remains bullish, timing and discipline matter more than ever.

Should You Still Buy Gold Now?

Whether it’s “safe” to buy gold now depends on your investment horizon and purpose.

• If you’re buying as a long-term store of value or portfolio hedge, gold still makes sense. Institutional support and global de-dollarization trends suggest long-term resilience.
• If you’re seeking short-term gains, be cautious. The current price level leaves little margin for error, and sharp pullbacks can happen unexpectedly.
• For best results, use a staggered buying approach—accumulate over time instead of chasing spikes.

Gold is not risk-free, but its enduring role in times of uncertainty remains unmatched.

Final Takeaway

Even as central banks race to expand their gold reserves, individual investors should resist the temptation to buy purely out of fear of missing out. The metal’s recent surge is grounded in legitimate macroeconomic forces—but that doesn’t mean it’s immune to corrections.

The best approach now is measured participation: treat gold as an anchor, not a rocket ship. Its glow may dim in bull markets, but in turbulent times, its quiet strength continues to shine the brightest.

About the Author

Elias Vennor is a professional writer and editor at EPfortal.com, specializing in Finance and Trending Topics. With a strong background in content research and journalism, Elias Vennor is dedicated to delivering accurate, well-sourced, and timely information to help needy peoples. Their articles follow strict editorial standards, relying on official sources and verified data to ensure credibility. Covering the latest Finance and more related Topics, Elias Vennor aims to make Updated information accessible and easy to understand for all readers.