Central banks worldwide are set to raise their gold holdings as a share of total reserves over the next five years, while reducing dollar-denominated reserves, according to a recent survey by the World Gold Council (WGC).
Despite gold’s surge to record highs—reaching $3,500.05 an ounce in April, up 95% since early 2022—the demand for the precious metal from central banks has risen significantly. The WGC survey, conducted between late February and May and involving 73 central banks, found that 76% expect to increase their gold reserves in five years, up from 69% in last year’s survey.
Conversely, nearly 75% of respondents anticipate a reduction in their dollar-denominated reserves over the same period, compared with 62% a year ago.
The WGC attributed this trend to gold’s proven resilience during crises, its role in portfolio diversification, and its effectiveness as an inflation hedge.
Central banks have accumulated over 1,000 metric tons of gold annually in each of the past three years—a notable jump from the 400-500 ton average seen during the prior decade. This sharp increase reflects heightened geopolitical and economic uncertainties.
The survey also revealed that 95% of respondents expect central bank gold reserves to grow within the next 12 months, up from 81% last year. The Bank of England remains the most favored storage location for these reserves.
Trade conflicts and tariffs are increasingly influencing reserve management, with 59% of central banks citing them as relevant factors. This concern is more pronounced among emerging markets and developing economies (69%) compared to advanced economies (40%).
