Key facts
- 89% of central bank reserve managers expect global gold reserves to increase in the next 12 months.
- 45% of respondents anticipate their own gold reserves will grow.
- Gold is seen as a safe-haven asset, a hedge against inflation, and a diversifier in reserve management.
- Central banks may reduce US dollar holdings over the next five years.
- The Bank of England is the preferred gold storage location.
- Global demand for gold jewelry declined in the first quarter.
Central banks are poised to continue increasing their gold reserves over the next 12 months, driven by a desire to hedge against economic and geopolitical uncertainty, according to the World Gold Council's annual survey. Nearly 90% of respondents expect global central bank gold holdings to rise, with a record 45% anticipating their own reserves will grow.
Gold's appeal as a safe-haven asset, a hedge against inflation, and a portfolio diversifier remains strong among central banks. These institutions increasingly view gold as a strategic asset, especially in volatile times. The survey also revealed a potential shift away from the US dollar, with nearly three-quarters of central banks considering a moderate or significant reduction in their dollar holdings over the next five years, while other currencies like the euro and yuan may hold steady.
The Bank of England emerged as the most favored location for gold storage, followed by domestic vaults and the Bank for International Settlements. However, central banks are also exploring diversification of storage locations and considering increasing domestic holdings. Despite these trends, global demand for gold jewelry saw a decline in the first quarter of the year.