Central Banks Keep Trusting Gold Amid Global Uncertainties

Gold stays strong as a safe asset. It helps reduce risks during tough economic and political times. (AI image)

Central Banks Still Favor Gold

With global economic worries and political tensions rising, central banks worldwide are adding more gold to their reserves. A recent survey by the World Gold Council highlights this trend.

Key Survey Findings

• About 95% of reserve managers expect central banks to keep increasing their gold reserves over the next year.
• This is the highest level since monitoring started in 2019, showing a big jump of 17% from 2024.
• Around 43% of central banks plan to grow their gold holdings in the coming year.

Why Central Banks Hold Gold

Reserve managers still see gold positively, even with its high prices and a steady 15-year trend of central bank purchases. The main reasons for keeping gold reserves include:

• Preserving value (80%)
• Diversifying portfolios (81%)
• Reliable performance during tough times (85%)

Emerging Markets and Developing Economies

Central banks in emerging markets and developing economies (EMDE) remain optimistic about gold’s future role in their reserve portfolios.

• 48% of EMDE respondents plan to increase their gold reserves in the next year.
• Only 21% of advanced economy respondents share this view, up from last year.

Main Reasons for Holding Gold

For EMDEs, the primary reasons for holding gold are:

• Inflation (84%)
• Geopolitical issues (81%)
• Interest rates

In contrast, advanced economies are less concerned, with 67% and 60% respectively focusing on these factors.

Trends in Gold Storage and Reserve Holdings

More central banks are storing gold domestically, with 59% now keeping gold locally, up from 41% in 2024.

• Most participants (73%) expect a drop in US dollar holdings in global reserves over the next five years.
• Other currencies like the euro and renminbi, along with gold, are expected to become more important in global reserves during this time.

Expert Insights

Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China), shared:

“After eight years of this survey, we’ve hit a key point: nearly half of the central bank respondents plan to increase their gold holdings in the coming year.”

“This is notable, especially with the record-high prices we’ve seen in 2025. It shows the current global financial and political climate. Gold remains a key asset as the world faces uncertainty. Central banks worry about interest rates, inflation, and instability – all reasons to turn to gold to reduce risk.”