Central banks around the world are buying gold at a record pace, with annual purchases exceeding 1,000 tonnes for the third year in a row, according to the 2025 Central Bank Gold Reserves (CBGR) Survey published on Tuesday, June 17. This marks a dramatic increase compared to the 400–500 tonnes purchased annually over the past decade.
The survey, conducted from February 25 to May 20, recorded participation from 73 central banks — the highest in the survey’s history. The findings reflect growing institutional confidence in gold as a strategic asset in the face of rising geopolitical tensions and economic instability.
“Central banks have accumulated over 1,000 tonnes of gold annually for three consecutive years,” the report stated. “This sharp increase has occurred amid growing geopolitical and economic uncertainty, casting doubt on traditional reserve strategies.”
According to the 2025 report, an overwhelming 95% of central banks believe global gold reserves will rise in the coming year — the highest level recorded since the survey began. Moreover, 43% of institutions surveyed plan to increase their own gold holdings during the same period, setting a new record for self-reported bullishness. Not a single respondent indicated plans to reduce their reserves.
Gold’s Strategic Value Gains Favor
The WGC survey identifies several motivations behind this surge in gold accumulation: its proven performance during crises, its function as an inflation hedge, and its ability to diversify portfolios. Central banks continue to cite gold’s historical resilience, store-of-value properties, and geopolitical neutrality as reasons for increasing exposure.
US Dollar Share Expected to Fall
Nearly 75% of central banks surveyed anticipate a moderate or significant decline in U.S. dollar holdings within global foreign exchange reserves over the next five years. This trend underscores a broader move toward de-dollarisation, with more institutions diversifying into other currencies — such as the euro and China’s renminbi — and hard assets like gold.
The inverse relationship between the dollar and gold further fuels this shift. When the dollar weakens, gold becomes more affordable to foreign buyers, reinforcing its appeal as a stable store of value in volatile markets.
Gold Viewed as a Geopolitical Shield
Beyond inflation protection, gold is now being regarded as a geopolitical hedge. With escalating conflicts in Eastern Europe and the Middle East, and divergence in global interest rate policies, central banks are turning to gold for its neutrality and crisis resilience.
The CBGR 2025 shows that 43% of central banks — the highest percentage ever — intend to boost their own gold holdings within the next year. None expect to cut back.
Rise in Active Gold Management
A growing number of central banks are not only increasing their gold holdings but also actively managing them. The survey revealed that 44% of respondents now manage their gold reserves actively, up from 37% in 2024. While enhancing returns remains the primary goal, risk management has overtaken tactical trading as the second most cited reason for this strategy shift.
Gold Storage Trends Shift Slightly
The Bank of England remains the top choice for gold storage, preferred by 64% of central banks. However, domestic storage is becoming more common, with 59% now storing at least some of their gold reserves within their own countries — a notable increase from 41% in 2024. Still, only 7% of central banks plan to expand domestic storage in the coming year, reflecting ongoing caution due to logistical and security concerns.
Market Outlook: Volatility and Caution Ahead
Gold prices have surged over 35% so far in 2025, driven by escalating geopolitical risks and global uncertainty. The ongoing conflict between Israel and Iran has pushed prices even higher.
“Gold traded with high volatility, fluctuating between $3,375 and $3,400 on Comex, while MCX prices stayed within the ₹98,900–₹99,300 range,” said Jateen Trivedi, Vice President and Senior Research Analyst at LKP Securities.
He added that markets are watching closely for signals from the U.S. Federal Reserve, whose interest rate decision scheduled for tomorrow is expected to act as a major catalyst for gold prices. Until then, further price movements will remain sensitive to developments in the Middle East.
“The underlying tone for gold remains positive,” Trivedi concluded. “Supported by geopolitical risks and economic uncertainty, the demand for gold shows no signs of slowing.”
As the global financial landscape shifts, central banks are clearly signaling that gold — long considered a traditional asset — is becoming a critical pillar in modern reserve strategy.
