Central banks around the world double down on gold as 89% expect global reserves to rise: WGC survey

Central banks around the world are expected to continue increasing their gold holdings, reinforcing the precious metal's growing role as a strategic reserve asset amid geopolitical uncertainty and diversification efforts, according to the World Gold Council's (WGC) annual Central Banks Gold Reserves Survey.

The survey released on Tuesday found that 89% of reserve managers expect global central bank gold holdings to increase over the next 12 months, underscoring sustained demand from the official sector. The findings come at a time when gold has overtaken US government bonds to become the world's second-largest reserve asset after the US dollar.

A record 45% of reserve managers said they expect their own institutions to increase gold holdings over the next year, the highest level recorded since the survey began. Moreover, 83% of respondents believe gold will account for a larger share of total reserves over the next five years, up from 76% in last year's survey.

The survey highlighted gold's rising importance in reserve management strategies. About 93% of respondents said their institutions currently hold gold reserves, compared with 81% a year earlier.

At the same time, confidence in the long-term dominance of the US dollar appeared to be weakening. Nearly 74% of reserve managers expect the dollar's share of global reserves to decline over the next five years.

Gold's appeal is increasingly being driven by its performance during periods of economic and geopolitical stress. A record 90% of respondents cited gold's ability to perform well during crises as a key reason for holding the metal. Long-term value preservation was identified by 84% of respondents, while 82% pointed to portfolio diversification benefits.

Geopolitical risk has also emerged as a major consideration, particularly among central banks in emerging and developing economies, where 85% of respondents said gold serves as an effective hedge against geopolitical uncertainties. In contrast, the importance of historical legacy as a reason for holding gold continued to diminish, with only 46% citing it, down from 62% in 2025.

The survey also revealed changing trends in gold storage practices. About 9% of central banks increased domestic gold storage over the past year, compared with 5% in the previous survey, while 10% diversified overseas storage locations, up from just 2% a year earlier.

The trend is expected to continue, with 7% of respondents planning to increase domestic storage and 9% intending to diversify foreign storage locations over the next 12 months.

Despite the shift towards domestic storage, the Bank of England remains the preferred vaulting location for central banks, with 57% of respondents using its facilities. Domestic storage ranked second, with 49% of respondents holding gold within their own countries.

Commenting on the findings, Shaokai Fan, Global Head of Central Banks and Head of Asia-Pacific at the World Gold Council, said central bank demand for gold remains firmly on an upward trajectory.

"A record number of respondents plan to add gold to their own reserves in the next year, while a large majority expect global official sector holdings to keep rising," Fan said. "What stands out is the shift in how central banks think about gold. Fewer see it as a legacy holding; more see it as an active, strategic allocation in an environment defined by geopolitical uncertainty and reserve diversification."