Central Banks have been big buyers of gold over the last several years. The chart above shows the buying recently.
Russia leads the list. They have been trying to get out of the dollar bloc for decades and increasing their gold reserves accomplishes that. At the same time, they are trying to create bilateral agreements with other countries, like China and India, to also escape the dollar dominance of global trade. All of this is one way that they have been able to survive the recent sanctions.
I found Turkey in second place quite interesting, particularly their recent increase in purchases. Wait! Gold bugs should be buying Turkish liras because they are increasingly backed by gold! Forget it. They have embarked on a hyperinflationary money printing regime that has led to 85% inflation. The gold didn't help.
Another large group of buyers are a number of emerging countries. After the crisis of 1998, emerging markets have increased their gold holdings to reduce their dependence on dollar debt. Unfortunately, it hasn't helped.
So how do we make money from this?
Certainly any increase in demand from central banks is supportive to the price of gold. But central banks are terrible traders and their timing is usually poor. Still, this is a background bullish factor as it takes some of the above ground stocks of gold and basically takes it off the market.
I'm not ready to buy gold yet. I'm waiting mainly for real interest rates to decline.