A global surge in gold buying by central banks is underway as governments respond to ongoing wars, escalating trade tensions, and persistent inflation, according to a new World Gold Council survey [1]. The survey reveals that 89% of central banks expect global gold reserves to grow over the next year, with a record 45% planning to add to their own holdings [1]. This trend is seen as a strategic move to prepare for a future marked by uncertainty, as gold is traditionally viewed as a safe-haven asset during periods of war, inflation, and market volatility [1].
The World Gold Council survey highlights that approximately 90% of central banks cite gold's performance during crises as a primary reason for holding it, while 84% value its role as a long-term store of value and inflation hedge, and 83% appreciate its ability to diversify reserves [1]. Notably, countries such as Poland, Uzbekistan, Kazakhstan, the Czech Republic, Chile, Jordan, and Ghana have been among the largest buyers of gold this year, in addition to China, which has received significant attention for its gold purchases [1].
Experts, including Cavatoni, suggest that central banks are diversifying away from traditional investments like U.S. Treasurys to add another layer of protection against inflation, global instability, and economic turmoil [1]. The survey also indicates that nearly 74% of central banks expect the U.S. dollar's share of global reserves to decrease over the next five years, while they anticipate gold's share will increase [1].
While the United States still holds the largest gold reserves globally, much of the current buying activity is driven by developing economies seeking to reduce reliance on foreign currencies beyond their control [1].
CONCLUSION
Central banks are significantly increasing their gold reserves as a hedge against ongoing economic and geopolitical risks, signaling a shift in global reserve management strategies. This trend is expected to continue, with many central banks anticipating a reduced role for the U.S. dollar and a greater emphasis on gold in the coming years.