Record Number of Central Banks Plan to Boost Gold Holdings as Global Volatility Rises

Market analysis

A record share of central banks expect to increase their gold holdings over the next 12 months as global market volatility and geopolitical uncertainty drive reserve managers toward the precious metal. According to the latest World Gold Council survey, nearly 90% of reserve managers anticipate that official sector gold holdings will continue to rise, with gold now seen by many as the top reserve asset, overtaking US government treasuries in importance.

The survey finds a growing appetite among central banks themselves: a record 45% of respondents said they expect to add to their institutions gold holdings in the coming year, up from 43% a year earlier. Longer-term sentiment is also strengthening 84% of reserve managers believe gold will make up a higher share of total reserves in five years time, a notable increase from 76% previously and this view spans both developed and emerging market central banks.

Banks pointed to several drivers behind the shift: ongoing geopolitical tensions, particularly the conflict in the Middle East, inflation concerns, and the threat of trade disputes. More than eight in ten respondents also cited golds role as a portfolio diversifier, reinforcing its strategic appeal for reserve portfolios.

Shaokai Fan, global head of central banks and head of Asia-Pacific at the World Gold Council, said the survey shows an important change in how central banks approach gold: fewer see it as a legacy holding and more treat it as an active strategic allocation in an environment shaped by geopolitical risk and reserve diversification.

Reserves, storage and the dollar

The move into gold is accompanied by waning sentiment toward the US dollar. While the dollar remains the dominant reserve currency, International Monetary Fund data and central bank survey responses indicate its share is expected to decline: nearly 75% of respondents expect the dollars share of global reserves to be lower five years from now, a view shared across developed and emerging economies.

Storage and custody choices are also shifting. The Bank of England remains the most popular vaulting location, but almost half of surveyed central banks said they have repatriated holdings from major gold markets or increased domestic storage. Over the past 12 months, 9% reported rising domestic storage and 10% said they have diversified where they store overseas. Looking ahead, 7% plan to increase domestic storage in the next year. Many institutions are also taking a more active approach to managing gold reserves to enhance returns and reduce risks.

Taken together, the survey paints a picture of accelerating central-bank demand for gold, structural reallocation away from dollar-centric positions, and evolving approaches to custody and active reserve management as policymakers respond to a more volatile geopolitical and economic backdrop.