Latest news with #CentralBankGoldReserves
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Business Standard
21 hours ago
- Business
- Business Standard
Central banks bet big on gold as reserves surge past 1,000 tonnes again
Central banks worldwide have added over 1,000 tonnes of gold annually for the third consecutive year, according to the 2025 Central Bank Gold Reserves (CBGR) survey. This sustained surge in gold accumulation marks a significant departure from the decade-long average of 400-500 tonnes, signaling pivot in reserve management amidst deepening geopolitical and economic uncertainty. The World Gold Council's latest survey – the most comprehensive since its inception eight years ago – collected responses from 73 central banks between 25 February and 20 May, reflecting the growing engagement of monetary authorities with the yellow metal. "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," said the World Gold Council in its report. Gold's Strategic Appeal Strengthens According to the 2025 findings, a record 43% of central banks expect to increase their gold reserves over the next 12 months, while none anticipate reducing them. An overwhelming 95% believe global central bank gold holdings will continue to grow during the same period. Key reasons behind this bullish outlook include gold's resilience during economic shocks, its inflation-hedging capabilities, and its continued effectiveness as a diversifier in increasingly complex portfolios. Central banks consistently cite gold's safe-haven appeal—especially during volatile market periods—as a key reason for its rising allocation. Shift Away from the US Dollar? Another important trend observed in the survey is a projected decline in the dominance of the US dollar in global reserves. Around 73% of respondents anticipate moderate to significantly lower dollar holdings in the next five years, with a corresponding increase in euro, renminbi, and gold allocations. This shift reflects both macroeconomic realignments and a growing desire among emerging economies to diversify away from traditional Western reserve currencies. For many, gold provides a neutral and universally accepted store of value, free from the geopolitical strings often attached to fiat assets. Gold Reserve Management Becoming More Active The number of central banks actively managing their gold reserves increased from 37% in 2024 to 44% in 2025, with risk management emerging as a more prominent driver than tactical trading. This signals a more hands-on approach to gold allocation, with institutions seeking not just safety but also stability and performance from their gold holdings. In terms of storage, the Bank of England remains the top vaulting choice, preferred by 64% of respondents. However, there's been a notable rise in domestic storage: 59% of central banks now store at least some of their gold at home, up from 41% in 2024. Yet only 7% plan to increase domestic storage in the coming year, suggesting most institutions are still content with current arrangements.
Economy ME
a day ago
- Business
- Economy ME
Central banks expect to increase gold holdings, decrease U.S. dollar holdings over next five years: WGC
Central banks have accumulated over 1,000 tons of gold in each of the last three years, up significantly from the 400-500 tons average over the preceding decade. This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers and investors alike The World Gold Council 's 2025 Central Bank Gold Reserves (CBGR) survey highlighted the continued importance of gold reserve management in these challenging times. Similar to findings from previous surveys, central banks continue to hold favorable expectations on gold. Respondents overwhelmingly believe that global central bank gold reserves will increase over the next 12 months. U.S. dollar holdings to decline as share of other currencies rises This year, a record 43 percent of respondents believe that their own gold reserves will also increase over the same period. Interestingly, none of our respondents anticipate a decline in their gold reserves. 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. In addition, gold's unique characteristics and role as a strategic asset continue to be valued by central banks: its performance in times of crisis, ability to act as a store of value, and its role as an effective diversifier continue to be cited as key reasons for an allocation to gold. The survey also revealed that the majority of respondents see moderate or significantly lower U.S. dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period. Read: FDI flows to developing economies fall to lowest level since 2005, says World Bank Bank of England remains most popular vaulting location In addition, the World Gold Council noted that the Bank of England remains the most popular vaulting location for gold reserves amongst respondents. A significantly higher percentage of respondents reported some domestic storage of gold reserves this year than they did last year, while just 7 percent indicated that they plan to increase domestic storage of gold reserves over the next 12 months. Ongoing economic and geopolitical uncertainty continues to weigh on reserve managers, as this year's findings highlight. Concerns over the inflation outlook and potential trade conflicts, particularly amongst EMDE banks, show that diversification and risk mitigation continue to be key drivers of strategic reserve management decisions. While there are divergences between advanced economies and EMDE central banks on some aspects, they share a common confidence in gold's role as a reliable store of wealth and a key component of long-term reserve management strategies. As the world becomes increasingly volatile and unpredictable, gold's safety, liquidity and return characteristics – the three key investment objectives for central banks – have risen in importance. The trends uncovered suggest that central banks continue to recognize the benefits of an allocation to gold, and indicate that their demand for gold will likely remain healthy for the foreseeable future.
