As global gold prices hover near record highs, an increasing number of central banks are rethinking how and where they acquire the metal. Instead of sourcing gold through traditional international channels, many are turning inward—purchasing directly from domestic artisanal and small-scale miners. What began as an exception is now becoming a structural trend, especially across Africa, Latin America, and parts of Asia.
This shift is not only economic. It reflects a deeper recalibration of monetary sovereignty, industrial development, and reserve strategy in an era of global uncertainty.
A Strategic Shift in Reserve Thinking
According to the World Gold Council, 19 of 36 central banks surveyed in 2025 are already buying gold directly from local sources, with four more considering the move. Last year, that number stood at just 14 out of 57.
Countries such as Colombia, Tanzania, Ghana, Zambia, Mongolia, and the Philippines are actively implementing this policy. The reasons are practical. Buying domestically allows central banks to use their own currencies rather than tapping into scarce dollar reserves. It’s not just a hedge against currency risk. It’s a move toward monetary self-determination.
Shaokai Fan, Head of Central Banks at the WGC, explains: “Traditionally, a central bank would exchange one reserve asset—dollars—for another: gold. But if you can acquire gold using local currency, you’re preserving your hard currency stockpile while still building strategic reserves.”
Efficiency, Cost, and Refining Capacity
Buying directly from domestic producers can also reduce costs. Central banks often pay slightly below the global spot price and avoid intermediary fees. But these savings come with conditions.
To integrate into the global financial system, central banks must refine their gold to meet LBMA Good Delivery (LGD) standards. If a country lacks accredited refining capacity, it must ship its gold abroad—adding time, risk, and expense. The Philippines and Kazakhstan have resolved this by developing domestic LBMA-certified refiners.
Where this infrastructure exists, the cost advantage is significant. Where it does not, the strategy still offers long-term benefits—provided that governments invest in local refining capabilities.
Supporting Domestic Industry
Beyond reserves, this strategy carries powerful implications for local economies. In many nations, small-scale gold mining employs thousands and forms a vital part of rural livelihoods. Yet much of it operates informally and outside legal structures.
By stepping in as a guaranteed buyer, central banks create a stable, regulated market for artisanal miners. This undermines criminal networks, improves traceability, and brings transparency to opaque supply chains.
“Having a credible, legal buyer like the central bank changes everything,” says Fan. “It gives small-scale miners a fair outlet, while encouraging formalization and environmental accountability.”
In Ghana, the state-run Ghana Gold Board secured agreements in April 2025 to buy 20 percent of all output from several mining firms. In Tanzania, a regulation issued in September 2024 requires exporters and producers to allocate at least 20 percent of their output to the central bank. These are not symbolic gestures. They are long-term commitments to stabilizing both reserves and labor markets.
Risk, Reputation, and Reform
Not all experts are optimistic. Nicky Shiels, Head of Metals Strategy at MKS PAMP, cautions that local sourcing introduces reputational and logistical challenges. International purchases through established bullion banks offer high standards of transparency and quality assurance. Domestic sourcing may not.
However, central banks have a unique capacity to raise standards across an entire sector. With proper oversight, documentation, and financial leverage, they can formalize informal mining, enforce labor protections, and ensure compliance with global norms.
This is where monetary policy meets industrial reform.
Toward a New Reserve Architecture
In a multipolar world shaped by geopolitical instability, currency realignment, and rising debt burdens, central banks are seeking not only to hold reserves, but to build resilience. Gold remains a cornerstone of that effort.
But gold sourced locally represents more than diversification. It is a statement of sovereignty, a signal of development intent, and a tool of strategic independence.
These purchases are not just tactical. They are philosophical. When a nation begins to accumulate reserves not through extraction of wealth from abroad but through activation of its own resources, it is making a deeper choice.
In today’s monetary landscape, that choice may prove defining.