Central Banks Plan Record Gold Purchases, Survey Finds

A record 45% of central banks plan to increase their gold holdings over the next 12 months, signaling a sustained strategic shift toward the metal as the primary reserve asset over US government bonds [1, 2]. This buying intent, the highest level recorded in the World Gold Council’s annual survey, reflects a growing consensus among reserve managers that gold will comprise a larger share of global reserves in the face of geopolitical and economic uncertainty [1, 2].

Strategic diversification drives demand

The survey of 76 central banks indicates that 89% of reserve managers expect global gold holdings to rise in the coming year, while 83% anticipate gold will account for a higher share of total reserves within five years, up from 76% in the previous year [1, 2]. This outlook follows a period of accelerated accumulation, where central banks added an average of 1,000 tonnes of gold annually over the past four years, compared to a 500-tonne average in the prior decade [2].

The motivation for this shift is rooted in risk management. A record 90% of respondents cited gold’s performance during crises as a primary driver, while 84% viewed it as a long-term store of value and 82% sought portfolio diversification [1]. Notably, 85% of emerging market and developing economy respondents emphasized gold’s role as a hedge against geopolitical risk, while the proportion citing "historical legacy" as a reason to hold gold dropped to 46% from 62% in the prior year [1].

Storage logistics shift

As central banks accumulate bullion, they are altering where they store it. The survey found that 9% of respondents increased domestic storage in the past 12 months, up from 5% the year before, while 10% diversified their overseas storage locations, up from 2% [1, 2]. This trend is set to continue, with 7% planning to increase domestic storage and 9% planning to diversify overseas locations in the coming year [1]. The Bank of England remains the most popular vaulting location at 57%, followed by domestic storage at 49% [1].

What to watch

• Actual net purchase volumes over the next 12 months to verify if the record buying intent translates into physical tonnage.
• Storage allocation trends to see if the move toward domestic vaulting accelerates amid geopolitical tensions.
• US dollar reserve levels to monitor if the anticipated 74% decline in the dollar's share over five years materializes.

The findings suggest gold is transitioning from a passive legacy asset to an active strategic allocation, as central banks prepare for a financial landscape defined by fragmentation and uncertainty [1, 2].