The global financial landscape is witnessing a significant shift as central banks increasingly turn to gold to diversify their reserves. This trend is driven by a combination of economic uncertainties and geopolitical factors, as highlighted in the World Gold Council’s 2026 Central Bank Gold Reserves survey.
The survey, which gathered responses from 76 reserve managers between February 5 and May 19, reveals that 45 percent of respondents anticipate an increase in their gold reserves over the next year. This surge in interest is part of a broader trend, with central banks having accumulated an average of 1,000 tons of gold annually over the past four years, doubling the 500-ton average of the preceding decade.
Shifting perspectives on the US dollar
The survey indicates a notable shift in perspective regarding the US dollar. A significant 74 percent of central banks expect the dollar’s share of global reserves to decline moderately or significantly over the next five years. Concurrently, 84 percent of respondents project that gold will constitute a larger share of total reserves by 2031, up from 76 percent in the 2026 survey.
This shift is largely attributed to a deteriorating outlook for the US dollar, compounded by geopolitical instability and trade frictions. The survey underscores the growing importance of gold as a safe-haven asset in an increasingly uncertain global economic environment.
Diverging priorities between advanced and emerging economies
The survey data reveals distinct motivations between central banks in advanced economies and those in emerging markets and developing economies (EMDE). While interest rate levels remain a primary concern across both groups, EMDE central banks exhibit a significantly higher concern regarding geopolitical instability and trade frictions.
Following the outbreak of conflict in the Middle East, 95 percent of EMDE respondents identified the geopolitical situation as a relevant factor in their reserve decisions, compared to 67 percent of advanced economy central banks. Similarly, 60 percent of EMDE managers cited potential trade conflicts and tariffs as relevant factors, nearly double the 33 percent reported by their advanced economy counterparts.
These differing risk assessments influence why institutions hold bullion. Though 90 percent of all respondents view gold’s performance during crises as a key driver, 85 percent of EMDE central banks value the asset as a geopolitical risk hedge, compared to only 56 percent in advanced economies. Conversely, advanced economy central banks primarily treat gold as a structural hold, with 83 percent categorizing it as a historical legacy assetcompared to just 33 percent of EMDE respondents.
Changes to vaulting and purchase strategies
Central banks are also modifying where they store their physical gold and how they finance new acquisitions. The Bank of England remains the dominant vaulting location at 57 percent, followed by domestic storage at 49 percent. However, the data points toward geographic diversification, with 9 percent of respondents increasing their domestic storage allocations and 10 percent diversifying their overseas vaulting locations over the past year.
This trend is expected to continue, with 7 percent planning to boost domestic storage and 9 percent seeking new foreign jurisdictions over the next year. Last year, countries like Germany and Italy faced political pressure to repatriate more than a third of their gold reserves worth an estimated US$245 billion from the Federal Reserve Bank of New York. European officials and organizations, including the Taxpayers Association of Europe (TAE), heavily pushed to bring sovereign bullion home to ensure absolute control amid fears of political interference with the Fed’s autonomy.
To fund future gold purchases, 50 percent of surveyed central banks intend to utilize local currency domestic purchase programs, which are already established in 53 percent of EMDE jurisdictions. Another 38 percent of respondents state they do so by liquidating existing reserve assets. Moving forward, the World Gold Council expects central bank demand for bullion to remain resilient as geopolitical risks continue to weigh on global markets.
