Central Banks set to boost Gold reserves amid geopolitical tensions

Central banks are poised to ramp up their gold reserves in the coming year, driven by ongoing geopolitical tensions and global economic uncertainty, according to a new report from the World Gold Council (WGC). The 2025 survey reveals that a striking 95% of reserve managers expect official sector gold holdings to rise over the next 12 months — the highest level of consensus recorded by the WGC to date.

Central banks around the globe are preparing to increase their gold holdings while scaling back on U.S. dollar reserves over the next five years, according to a new survey by the World Gold Council (WGC). The shift reflects growing concerns around geopolitical tensions, inflation risks, and the need for greater diversification in reserve management.

The WGC’s 2025 Central Bank Gold Reserves Survey gathered responses from 73 central banks between February 25 and May 20. It revealed that 76% of respondents expect their gold reserves to be higher in five years — up from 69% in 2024. In contrast, nearly three-quarters anticipate a decline in their dollar-denominated reserves, rising from 62% last year. These trends signal a clear and accelerating move away from dollar dependency.

The appetite for gold has remained strong despite its meteoric price rise. In April 2025, gold reached an all-time high of $3,500.05 per ounce, marking a 95% surge since February 2022, when Russia’s invasion of Ukraine rattled global markets and triggered a rush for safe-haven assets. Central banks have not only withstood this price rally — they’ve actively increased their buying.

“This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty,” the WGC noted. For three consecutive years, central banks have acquired more than 1,000 metric tons of gold annually — a dramatic rise from the 400–500 ton average seen in the previous decade.

The motivations behind this trend are multifaceted. Gold’s historical performance during crises, its ability to hedge against inflation, and its role in enhancing portfolio diversification have emerged as key drivers. The WGC highlighted these as central themes influencing central banks’ plans to accumulate more gold in the year ahead.

Indeed, confidence in gold as a strategic reserve asset is at a record high. According to the survey, 95% of respondents believe central bank gold holdings globally will increase in the next 12 months — up from 81% last year. The Bank of England continues to be the most preferred location for storing gold, underscoring its reputation as a secure and stable custodian.

The shift in reserve strategy also reflects broader macroeconomic anxieties. Around 59% of central banks cited potential trade conflicts and tariffs as critical considerations in managing their reserves. Interestingly, 69% of emerging and developing economy respondents pointed to these concerns, compared to just 40% from advanced economies — suggesting that economic vulnerabilities and exposure to global shocks may be shaping more assertive diversification strategies in the Global South.

As global power dynamics evolve and economic fragmentation becomes more pronounced, central banks are positioning gold at the center of their long-term risk management strategies. The dollar remains a key player, but its supremacy is being gradually questioned in an increasingly uncertain and multipolar world. In this context, gold is reclaiming its historical role — not just as a store of value, but as a vital pillar of sovereign financial security.