A global shift is underway as central banks move away from the U.S. dollar and embrace gold in response to growing geopolitical risks, inflation concerns, and shifting trade dynamics. A new survey by the World Gold Council reveals that 76% of central banks expect to increase gold holdings over the next five years, a sharp rise from last year’s 69%.
Gold Surges Amid Crisis Demand
The renewed interest in gold comes as prices hit a historic high of $3,500.05 per ounce in April, fueled by safe-haven demand after Russia’s invasion of Ukraine and global financial instability.
“Gold’s crisis performance, diversification benefits and inflation hedge appeal are fueling stronger accumulation,” the survey noted.
Central banks have purchased more than 1,000 metric tons of gold annually since 2022, doubling the pace seen in the previous decade. This buying trend continues despite higher prices, signaling long-term confidence in gold as a store of value.
U.S. Dollar Faces Decline in Global Reserves
In contrast, nearly 75% of central banks now expect their U.S. dollar reserves to decline, up from 62% in 2024. This reflects mounting concerns over economic sanctions, U.S. fiscal policy, and growing currency weaponization.
The declining dominance of the dollar marks a major turning point in global finance, especially for emerging economies seeking to diversify their reserve assets and reduce dependency on Western financial systems.
Emerging Markets Lead the Reserve Realignment
The report highlights that emerging and developing countries are leading this reserve shift. Approximately 69% of central banks in these regions cited trade conflicts as a significant concern, compared to just 40% in advanced economies.
In particular, tariffs, geopolitical tensions, and supply chain disruptions were key drivers behind the reserve strategy adjustments. As global trade becomes more fragmented, gold offers a neutral, universally accepted reserve choice.
Looking Ahead: Gold’s Role Set to Grow
A record 95% of central banks believe global gold reserves will continue rising over the next year, with the Bank of England remaining the top choice for storage.
This trend signals an accelerating de-dollarization movement and highlights how gold is reclaiming its role as a pillar of central bank strategy amid financial uncertainty and shifting power dynamics.
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