Gold Reserves of Central Banks to Increase Globally Amid Shift from USD, as per the World Gold Council Survey

95% of central banks expect gold reserves to rise over the next 12 months

June 17, 2025 – In a highly volatile environment and geopolitical tensions, the WGC’s (World Gold Council) fresh survey suggests that there is a strong bullish sentiment among central banks to boost gold reserves. Around 95% of the respondents have forecasted an increase in central bank gold reserves. A record 43% of respondents also agreed that their institutions will increase gold holdings this year.

This survey comes at a time when there are increased worries about the political stability and reliability of the U.S. dollar. The conventional strength and appeal of the yellow metal during turbulent times and inflationary pressures also support the survey results. Gold now ranks as the second-largest official global reserve asset, only second to the USD and ranking above the Euro in the list.

Diversification, volatility, and geopolitical risk drive strategy

The annual survey, conducted between February and May 2025, underscores gold’s growing role as a strategic reserve asset in an era marked by economic uncertainty and geopolitical tensions. According to the WGC, central banks increasingly view gold as an “important strategic asset” for diversification and risk mitigation.

Decline in US dollar dominance expected

A key highlight of the findings is that 73% of respondents foresee the share of US dollar holdings in global reserves declining, either moderately or significantly, over the next five years. In contrast, the euro, renminbi, and gold are expected to gain share in reserve portfolios.

Strategic shift in storage and management

The Bank of England continues to be the top vaulting location globally, but there’s growing interest in domestic storage, rising from 41% in 2024 to 59% in 2025. Still, only 7% plan to increase domestic storage in the coming year. Meanwhile, the share of central banks actively managing their gold reserves increased from 37% last year to 44% this year, motivated by higher returns and better risk management.

Broader macroeconomic concerns influence decisions.

The report notes that ongoing challenges, such as the inflation outlook, trade conflicts, and geopolitical tensions, particularly among emerging and developing economies, are driving the push for diversification and caution in reserve management strategies.

Some countries are bringing home previously stored bullion, reflecting a new focus on reserve sovereignty.

This year’s WGC survey reaffirms the precious metal’s enduring appeal as a hedge and stabiliser. As global uncertainties persist, gold’s relevance in central bank strategies appears stronger than ever, with significant implications for currency composition and long-term monetary resilience. Given its historical performance as a stable money standard, gold can be a good store of value in a highly volatile time.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations