A survey by the World Gold Council indicates that gold is playing an increasingly important role in global reserve holdings.
Dubai: Central banks are projected to continue increasing their gold purchases over the coming year, as reserve managers increasingly view the metal as a strategic asset amid geopolitical tensions, economic uncertainty, and growing pressure on the US dollar, according to the World Gold Council.
The World Gold Council’s annual Central Banks Gold Reserves Survey found that 89% of reserve managers anticipate global central bank gold holdings will rise over the next year. It also showed a record 45% expect their own institutions to increase their gold reserves over the same period.
The survey suggests gold is becoming increasingly central to reserve management, with 83% of respondents expecting its share in total reserves to rise over the next five years, up from 76% last year.
It also found that gold ownership among central banks is now nearly universal, with 93% of respondents reporting holdings compared with 81% a year earlier—highlighting its broader adoption across official reserves.
The survey also points to a shift in attitudes toward the US dollar, with 74% of respondents expecting its share of global reserves to decline over the next five years.
However, this does not imply a move away from the dollar, which still underpins global trade and financial systems. Instead, it reflects a broader diversification strategy among central banks, as reserve managers look to spread risk more widely—giving gold a larger role in portfolios designed to better withstand market volatility and geopolitical shocks.
Demand for gold is increasingly being driven by its perceived role as a crisis hedge. The survey shows a record 90% of respondents cite gold’s performance during periods of turmoil as a key reason for holding it, while 84% highlight its function as a long-term store of value and 82% point to its benefits for portfolio diversification, according to the World Gold Council.
Gold’s role as a hedge against geopolitical risk was particularly strong among emerging market and developing economy central banks, with 85% of respondents citing it as a key reason for holding the metal, according to the World Gold Council.
At the same time, fewer central banks now view gold primarily as a legacy or historical holding. The share citing historical legacy as a reason for holding gold dropped to 46%, down from 62% in 2025.
Shaokai Fan, Global Head of Central Banks and Head of Asia-Pacific (excluding China) at the World Gold Council, said this year’s survey signals a clear upward trajectory in central bank gold demand, with more institutions planning to add to reserves and a broad expectation that global official holdings will continue to rise.
He added that the key shift is in mindset: gold is increasingly seen not as a passive legacy asset, but as an active strategic allocation in a world shaped by geopolitical uncertainty and ongoing reserve diversification.
Central bank gold buying has already accelerated significantly in recent years, with average annual purchases reaching about 1,000 tonnes over the past four years—roughly double the ~500 tonnes per year recorded in the previous decade, according to the World Gold Council.
The 2026 survey was conducted between February 5 and May 19, with most responses collected after the outbreak of conflict in the Middle East. The World Gold Council noted that this timing provides a clearer picture of how reserve managers are reassessing gold during a period of heightened geopolitical tension.
Participation also reached a record high of 76 responses, the strongest level since the survey began nine years ago.
On funding strategies, the survey found that 50% of central banks planning new gold purchases intend to finance them through domestic buying programmes in local currency, while 38% expect to fund purchases by selling existing reserve assets.
Central banks are also reassessing how and where they store their gold, according to the World Gold Council survey.
The share of respondents increasing domestic storage rose to 9% over the past 12 months, up from 5% a year earlier. At the same time, 10% reported diversifying overseas storage locations, compared with just 2% in the previous survey.
Looking ahead, 7% of central banks plan to expand domestic storage over the next year, while 9% intend to further diversify their offshore vaulting arrangements.
In terms of preferred locations, the Bank of England remains the most widely used vaulting centre, cited by 57% of respondents. Domestic storage ranks second at 49%. The Bank for International Settlements is used by 16% of central banks, while reliance on the Swiss National Bank has declined to 6%, down from 12% in 2025.
Central bank demand has become one of the key structural supports for gold prices in recent years, particularly as reserve managers seek protection against inflation, currency volatility, and geopolitical uncertainty.
Continued buying by official institutions can help provide a “price floor” for gold, even when private investor demand fluctuates with changes in interest rates or movements in the US dollar. In that sense, steady official-sector accumulation tends to reduce downside pressure on prices during periods of market stress.
This sustained demand can also influence global bullion prices, which ultimately feed into local jewellery and investment gold rates. However, while strong central bank buying signals enduring confidence in gold as a reserve asset, it does not guarantee uninterrupted price increases. Instead, it highlights that major reserve managers still view gold as a core strategic holding in an increasingly uncertain global financial environment.
