Record 45% of Central Banks Plan to Increase Gold Reserves in Near Term

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Record 45% of Central Banks Plan to Increase Gold Reserves in Near Term

A record 45% of central banks worldwide expect to increase their gold reserves in the short term, according to the latest survey from the World Gold Council. This marks the highest percentage in the survey’s history, signaling a continued shift toward gold as a strategic reserve asset amid geopolitical uncertainty and evolving monetary policy landscapes.

Survey Details and Key Findings

The World Gold Council’s 2024 Central Bank Gold Reserves Survey, which gathered responses from 70 central banks, reveals that 45% of respondents plan to raise their gold holdings over the next 12 months. This figure is up from 29% in 2023 and represents a clear acceleration in gold accumulation intentions. Only 8% of central banks indicated they plan to decrease their gold reserves, the lowest proportion ever recorded.

The survey also found that 74% of central banks believe gold’s role as a reserve asset will increase over the next five years. Key drivers cited include gold’s performance during crises, its lack of default risk, and its ability to hedge against inflation and currency fluctuations. Notably, central banks from emerging economies are leading the charge, with many viewing gold as a tool for financial diversification away from the US dollar.

Why Central Banks Are Buying More Gold

Several structural factors underpin this trend. First, the freezing of Russian central bank assets in 2022 prompted many nations, particularly in Asia and the Middle East, to reassess the safety of holding large dollar-denominated reserves. Gold, as a physical asset with no counterparty risk, offers a store of value that cannot be sanctioned or frozen.

Second, elevated inflation and interest rate uncertainty have eroded confidence in fiat currencies. Central banks are increasingly prioritizing capital preservation over yield, making gold an attractive option. Third, geopolitical fragmentation and trade tensions have encouraged reserve managers to build buffers against external shocks.

Implications for Global Markets

The sustained buying spree by central banks has been a significant driver of gold prices, which have repeatedly hit all-time highs in 2024 and 2025. With demand from this sector showing no signs of abating, analysts expect continued upward pressure on prices. However, the trend also signals a broader shift in the global financial architecture, as countries reduce reliance on the dollar and seek a more multipolar reserve system.

For retail investors and market participants, the central bank buying pattern reinforces gold’s status as a safe-haven asset. It also suggests that any significant price corrections may be met with strong institutional buying, providing a floor under the market.

Conclusion

The record 45% of central banks planning to increase gold reserves reflects a fundamental reassessment of reserve management strategies worldwide. Driven by geopolitical risk, inflation hedging, and a desire for diversification, this trend is reshaping the global gold market and reinforcing the metal’s role in the international monetary system. As central banks continue to accumulate gold, the implications for currency markets, interest rates, and investment portfolios will remain significant.

FAQs

Q1: Why are central banks buying so much gold right now?
Central banks are increasing gold reserves to diversify away from the US dollar, hedge against inflation and geopolitical risk, and hold an asset with no counterparty default risk. The freezing of Russian assets in 2022 accelerated this trend.

Q2: How does central bank gold buying affect gold prices?
Sustained central bank purchases provide strong underlying demand for gold, which helps support prices and can drive them higher, especially when combined with other factors like inflation and interest rate expectations.

Q3: Which central banks are leading the gold buying trend?
Central banks from emerging economies, particularly in Asia (China, India, Kazakhstan) and the Middle East (Turkey, Qatar), have been the most active buyers. However, some developed economy central banks have also added to reserves.

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