The World's Smartest Gold Buyers Are Back

"Nobody knows where gold trades next month. But the biggest buyers on earth just showed you what they do when gold gets cheaper. They buy more."

Since publishing my 26 Stocks to Watch for 2026 at the start of the year, my view on gold miners has changed. I didn’t include GDX on that list because I thought the risk/reward wasn’t compelling after the huge run in precious metals last year.

But the relative underperformance of miners versus gold this year has made the group far more interesting to me (again). I noted this last month in my article Stocks I’d Watch If The Market Keeps Plunging.

But a smooth ride higher isn’t a guarantee. I still think there’s a reasonable chance gold gets caught up in a broader market-wide deleveraging event, and if that happens I wouldn’t be surprised to see miners sell off further. I’d consider buying into that weakness. My base case remains that the next major market dislocation ultimately ends with another enormous round of Fed liquidity, which I believe would be highly supportive of precious metals and miners.

In other words, I like the setup for miners, and GDX in particular, materially more today than I did on January 1. You can read about other sectors of the market I also think would be cheap after a market selloff here and here.

Why Central Banks Love A Gold Sell-Off

By Peter Schiff, Schiff Sovereign

On July 7, Bloomberg published an article with the headline: “Gold’s Bull Market Has Ended and Now All Eyes Are on Bears,” explaining how many retail investors have headed for the exits.

That same day, the People’s Bank of China, the country’s central bank, reported its largest monthly gold purchase since 2023.

Of course, June marked its twentieth consecutive month of adding gold to its reserves. Central banks are relatively price insensitive. They buy gold as a long term hedge to preserve value, not to trade back for more paper.

But they aren’t stupid either, and this shows they are buying the dip.

Gold peaked at $5,589 per ounce on January 28 and trades around $4,000 today, roughly 28% below the high. The second quarter was gold’s worst since 2013. Investors have pulled about $18 billion out of gold ETFs since the peak, much of it late money that piled in during last year’s frenzy and bolted the moment momentum broke.

But the price is not the story. The story is what central banks are doing.

Central banks have been the dominant force in gold since 2022, when Russia invaded Ukraine, the US froze $300 billion of Russia’s central bank reserves, and every finance ministry on earth learned that dollar assets were not the safe havens they’d believed.

In 2024, central banks bought 1,090 tons of gold, close to an all-time record.

That massive demand made gold expensive. The price nearly doubled from its 2025 low, and central bank buying slowed to 863 tons. That was still higher than historical averages, but down 21% from the year before.

The slowdown was not fading interest; it was price discipline. Central banks are not traders chasing momentum. They are savers accumulating a reserve asset, and like any sensible saver, they buy less when the thing they are saving in gets expensive.

And they speed back up when it goes on sale. In the first quarter of this year central banks bought 244 tons, more than the previous quarter and above the five-year average. China alone has added about 40 tons in the first six months of 2026, compared to just 27 tons in all of 2025. The People’s Bank of China bought more gold last month, with the price down nearly 30% from its high, than in any single month of the entire run-up.

The reason is simple: nothing has changed about why they buy.

The World Gold Council, the industry group that tracks official gold demand, surveyed 76 central banks this year. Seventy-four percent said they expect the dollar’s share of global reserves to be lower five years from now.

These are the institutions that actually hold the world’s reserves, and they are telling you, on the record, that they plan to keep moving away from the dollar.

None of their reasons went away when the price fell. The US national debt keeps growing by trillions, Congress has no plan beyond borrowing more, and Washington keeps proving it will continue to weaponize the dollar.

A central bank holding dollars is holding the liability of a government that is both overextended and unpredictable. Gold sitting in its own vault carries neither risk.

That calculus was true at $5,589, and it is just as true at $4,000.

A trader who is down 28% has a problem if they are trying to quickly turn a profit, and accumulate more paper dollars.

But a saver who plans to accumulate gold for the next decade just got a better price. That is why the sell-off did not scare away the biggest buyers in the market.

It may be exactly what they were waiting for. We made this argument to our subscribers of our investment research newsletter, Strategic Assets, in January.

With gold near its all-time high, we said that this was no longer the early stage of a bull market, that a major drawdown was a real possibility, and that it was time to take some profits.

In fact, subscribers who took action on our research locked in gains of more than 950% on a small silver producer and 540% on a gold and silver producer, both in under a year.

Now the sell-off has come for the miners too. Even solid, debt-free producers are trading as much as 50% below their highs from earlier this year.

But again, as nothing had changed about the long term gold thesis, little has changed about the profitability of these companies. They are still wildly profitable at $4,000 gold, which is far above projections they had planned for.

Some of these companies are still pulling gold out of the ground at a cost of just $1,000 an ounce, which is an amazing margin.

So we are starting to buy again.

It is the same discipline the central banks just demonstrated: slow down when the asset is expensive, step up when it gets cheap, and never confuse a price correction with a change in the story.

Nobody knows where gold trades next month. But the biggest buyers on earth just showed you what they do when gold gets cheaper. They buy more.

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