Why the gold rally isn’t over yet in Commodity News 28/02/2026 Momentum may moderate from here. But the structural drivers underpinning the market remain firmly in place – and in some cases are strengthening. 1. Central banks are still buying Official sector demand remains the backbone of the gold market. Since Russia’s invasion of Ukraine in 2022, central banks, particularly across emerging markets, have accelerated reserve diversification in response to sanctions risk, geopolitical fragmentation and a desire to reduce reliance on the US dollar. Crucially, this demand has proved steady and largely price insensitive. Poland, the world’s largest reported gold buyer last year, has signalled further purchases as it targets a higher absolute level of gold holdings rather than a fixed share of reserves. It is now targeting around 700 tonnes of gold, up from roughly 550 tonnes, rather than a fixed 30% share of reserves. This underscores that reserve accumulation remains strategic, not tactical. China’s central bank also extended its gold buying to a fifteenth month in January. As long as geopolitical fragmentation persists, a meaningful reversal in central bank gold demand looks unlikely. This structural floor continues to underpin the market at elevated price levels. 2. Geopolitics back to the forefront Geopolitical risk has re-emerged as a dominant macro driver. From renewed Middle East tensions to trade frictions and tariff threats, investors are navigating a more uncertain global environment. Policy unpredictability, particularly around trade, is increasing volatility across asset classes. Against this backdrop, safe-haven demand remains well supported. Gold’s role as a hedge against geopolitical and policy shocks is once again in focus. 3. Fed easing could add a tailwind A shift in the US monetary policy backdrop could provide an additional tailwind for gold. While the Federal Reserve remains cautious, the balance of risks is gradually tilting towards easing as growth momentum cools and inflation continues to normalise. Our US economist expects the Fed to begin cutting rates in the second quarter, with policy becoming incrementally less restrictive over the coming quarters. Even a modest easing cycle would be supportive for gold, lowering real yields and reducing the opportunity cost of holding non‑yielding assets. 4. ETFs showing renewed appetite ETF positioning remains well below the 2020 peak, leaving room for further inflows. After a period of consolidation, gold ETFs are once again attracting investor interest. While central bank buying continues to anchor the market, ETFs have the capacity to amplify price moves. If rate‑cut expectations firm or geopolitical risks intensify, a renewed wave of ETF inflows could provide another leg higher for gold prices. Historically, ETF holdings tend to rise alongside prices and are closely linked to expectations for US monetary policy, reinforcing the case for stronger inflows as the Fed moves towards easier policy. 5. Digital dollars and reserve evolution Reserve evolution is no longer confined to central banks. The rapid growth of US dollar-backed stablecoins has created a new institutional buyer of reserve assets. Stablecoin issuers, most notably Tether, have become significant buyers of reserve assets, including US Treasuries and increasingly gold. Tether alone purchased over 70 tonnes of gold last year, second only to Poland among reported buyers, and now holds around 140 tonnes across its r