After an active third quarter, central banks continue to use cheaper gold as an opportunity to replenish official reserves. China retains a dominant position in the market, increasing its holdings for the second consecutive year.

In social-media posts about October purchases, Krishan Gopaul, senior analyst for EMEA at the World Gold Council, noted that China bought 26 tonnes of gold. As a result, the country's official gold reserves are now nearly comparable to those of several developed states.

He said total gold holdings now reach 2,435 tonnes—only 2 tonnes less than France's reserves.

Despite China's leading position in the gold market, Gopaul emphasized that it is not acting alone.

Last month, the Czech National Bank added 2.5 tonnes to its reserves. The total volume of its gold holdings reached 90 tonnes — close to the stated target of 100 tonnes.

Gopaul also reported that the Central Bank of the Republic of Uzbekistan purchased 7 tonnes of gold in October. Thus, year-to-date net purchases amount to 63 tonnes, and total gold reserves stand at 453 tonnes.

Last week the National Bank of Poland announced it had met its target of raising official reserves to 700 tonnes. According to Gopaul's calculations, the bank bought 27 tonnes of gold in October. Despite reaching its initial goal, the regulator's governor, Adam Glapinski, indicated purchases may continue. "You ask what will happen after we reach 700 tonnes? We need to think it over calmly. I see no reason to stop buying gold," Glapi?ski said. "I believe our gold reserves should grow in proportion to total reserves."

October's buying activity continued the very busy summer. Last week the World Gold Council reported that central banks acquired 321 tonnes of gold in the third quarter. That is 42% higher than the same period a year earlier and substantially above the five-year quarterly average (227 tonnes).

WGC forecasts that central banks will remain active in the gold market through year-end.

"Central-bank demand in the third quarter surpassed expectations, and a small upward revision to second-quarter data only confirms the significant volume of official-sector purchases. This aligns with the strategic interest identified in our surveys and suggests demand will remain resilient in the fourth quarter," analysts wrote in last week's demand-trends report. "At the same time, purchase volumes appear to depend on price. That relationship can provide some support to prices and contribute to stability, although it is not strong enough to guarantee a firm price floor for gold."