Central banks shift focus to gold over dollar for reserves: WGC survey
Central banks around the world are increasingly favouring gold over the US dollar in their reserve portfolios, according to a recent survey.
As reported by Reuters, the World Gold Council (WGC) conducted the survey between 25 February and 20 May, gathering responses from 73 central banks.
Demand for gold among central banks has surged over the past three years, despite the metal’s sharp price increase to successive record highs. In April, gold reached an all-time high of US$3,500.05 per ounce—up 95% since February 2022, when Russia invaded Ukraine.
The survey found that 76% of them expect gold to make up a larger portion of their reserves within the next five years—up from 69% in last year’s poll.
A record 95% of respondents believe that central bank gold holdings will increase over the next 12 months, a sharp rise from 81% the previous year. The Bank of England remains the most preferred location for storing gold reserves, according to the report.
At the same time, confidence in the US dollar is waning. Nearly three-quarters of central banks surveyed expect to reduce their dollar-denominated reserves over the next five years compared with 62% last year.
"Gold’s performance during times of crisis, portfolio diversification and inflation hedging are some key themes driving plans to accumulate more gold over the coming year," WGC said in a release.
Central banks have acquired over 1,000 metric tonnes of gold annually for the past three years—more than double the average of 400–500 tonnes seen in the previous decade.
Trade tensions and tariff risks are also influencing reserve strategies, with 59% of respondents citing them as relevant. Notably, 69% of central banks from emerging and developing economies highlighted this concern, compared to just 40% from advanced economies.
