Key Points:
- A record 29 percent of central banks plan to increase their gold reserves over the next 12 months.
- Around 81 percent of institutions expect global gold reserves to rise, the highest level since 2018.
- The ongoing de-dollarization trend has pushed the U.S. dollar’s share of global reserves down to 58 percent.
- Geopolitical instability, inflation, and sanctions risks are driving the sovereign rush to physical gold.
Central Banks Plan to Buy more gold over the coming year as a historic shift toward de-dollarization and rising geopolitical instability reshape global monetary reserves. A newly published comprehensive survey of central bank reserve managers reveals that a record-breaking percentage of institutions intend to expand their physical gold holdings over the next 12 months. This planned buying spree highlights a deep, systemic transformation in the global financial landscape, where sovereign wealth managers increasingly prioritize stable, tangible assets over traditional Western fiat currencies.
The detailed survey results paint a highly bullish picture for the precious metal, reflecting widespread anxiety among global policymakers. Approximately 29% of surveyed central banks plan to actively increase their gold reserves in the next year, marking the highest level of positive buying sentiment recorded since the annual survey began in 2018. Additionally, an overwhelming 81% of respondents expect global gold reserves to increase overall over the next 12 months, up from 71% last year. Conversely, nearly 62% of central banks expect the U.S. dollar’s share of global reserves to decrease over the next five years.
The accelerating trend of de-dollarization directly drives this sovereign migration toward gold, as emerging market economies actively seek to reduce their vulnerability to unilateral Western sanctions. Following the historic freezing of more than $300 billion in Russian foreign exchange reserves by Western nations in 2022, central banks outside of the G7 realized that paper assets held in foreign banks are highly vulnerable to political pressure. By replacing dollar-denominated treasury bonds with physical gold stored natively in their own vaults, these institutions can successfully protect their national wealth from foreign judicial overreach and asset seizures.
This structural shift has already caused a steady, long-term decline in the U.S. dollar’s dominance as the undisputed global reserve currency. According to currency tracking data from the International Monetary Fund, the greenback’s share of global foreign exchange reserves has steadily slipped to approximately 58% recently, down significantly from over 70% at the turn of the century. As the United States continues to run widening fiscal deficits, accumulate massive national debt, and weaponize its financial system to enforce foreign policy goals, international asset managers are actively searching for neutral, non-aligned reserve alternatives.
The macroeconomic environment has further enhanced gold’s appeal as the ultimate long-term hedge against inflation and systemic economic instability. The ongoing conflict in the Middle East and the accompanying blockade of the Strait of Hormuz have recently triggered severe global energy shocks, driving up fuel costs and keeping worldwide inflation sticky. With consumer price indexes running hot across North America and Europe, central banks cannot easily rely on paper currencies to preserve purchasing power. Physical gold, which carries zero default risk and cannot be inflated by government printing presses, provides a highly reliable store of value during times of stagflationary stress.
This hawkish sentiment is fully backed by unprecedented, record-breaking physical purchasing volumes over the past several years. Central banks purchased a massive 1,037 tonnes of gold in 2023, followed by another near-record haul of 1,030 tonnes in 2024. This historical buying streak has continued with immense momentum throughout the first half of this year, as sovereign institutions systematically absorb large portions of global mining output. This relentless, state-backed demand has acted as a powerful price floor, pushing spot gold prices to consecutive record highs and completely transforming the dynamics of the global precious metals market.
Emerging market central banks in Asia and Eastern Europe are leading this historic accumulation strategy. The People’s Bank of China recently concluded an unprecedented 18-month consecutive buying streak, substantially expanding its national gold reserves to insulate its financial system from potential trade blockades. Other aggressive buyers include the Reserve Bank of India, the National Bank of Poland, the Central Bank of Turkey, and the Monetary Authority of Singapore. These institutions view gold not merely as a passive investment asset, but as a critical strategic shield necessary to defend their national sovereignty during an era of fragmented global trade.
The survey also revealed a widening divergence in how advanced and emerging market economies view the future of the global financial system. While central banks in advanced Western nations still hold massive legacy gold reserves—often accounting for over 70% of their total foreign exchange holdings—they are less inclined to purchase additional metal. In contrast, emerging market institutions, whose gold holdings historically made up less than 10% of their portfolios, are driving nearly all of the active buying. This divergence suggests that developing nations are actively preparing for a multipolar currency world where the U.S. dollar no longer commands absolute authority.
The historic findings of the central bank survey demonstrate that the global monetary landscape is undergoing its most profound realignment since the collapse of the Bretton Woods system. By successfully choosing tangible, non-sanctionable physical gold over Western fiat currencies, the world’s financial guardians are gradually building a more decentralized global financial architecture. As more nations execute their de-dollarization roadmaps and increase their physical gold reserves over the coming year, the dollar’s decades-long monopoly will continue to erode. This permanent transition proves that in an era of geopolitical instability and persistent inflation, trust in paper currency must ultimately yield to the security of tangible assets.
