Gold’s glittering run to US$6,000 could power NEM, NST, and EVN gains for years

This reallocation represents an extraordinary reweighting of global monetary power. Out of roughly US$12.3 trillion in total allocated reserves, nearly US$3 trillion now sits in gold – a scale of diversification unseen in the modern fiat era. The IMF’s data, though neutral in tone, points unmistakably to a world where policymakers are actively reducing exposure to the US dollar and reinforcing their sovereign balance sheets with tangible assets.

Here, comments from Canadian investment bank Canaccord Genuity provide an important interpretive layer. In its latest “The Week in Gold” update released Monday, the firm notes that the ongoing migration in central-bank reserves “reflects both a deliberate hedge against US fiscal and political instability and a reassertion of monetary independence among emerging economies.”

Further, Canaccord observes that central-bank gold accumulation – now running at around 1,000 tonnes per year – has become one of the most powerful drivers of the gold price, absorbing roughly a quarter of global mine output. As the firm’s analysts put it, “Gold’s share of central-bank reserves continues to rise,” and if the current pace persists, “the market impact could remain profound.”

But wait, there’s more… potentially way more!

This idea – that the pervasive central-bank bid of the last 18-months is not just real, but structurally transformative – is a tantalising prospect for gold bulls. Canaccord’s historical analysis on central bank reserve holdings of gold makes for fascinating reading. Between 1950 and 1987, gold accounted for roughly 60% of total global reserves – nearly three times today’s share.

That said, much of that era coincided with the Bretton Woods framework and the early years of the post-gold-standard adjustment, so it’s debatable whether it’s a reasonable comparison period. It does, however, beg the question: What if central banks were to “re-gold” their balance sheets back toward that long-term average?

Canaccord’s analysts estimate that to raise gold’s share to 30% of reserves – halfway to the historic mean – would require an additional 2,700 tonnes per year of purchases for 10 years – equivalent to about 75% of current global annual mine production. Achieving that without drastically lifting prices would be impossible, they suggest.

Instead, they offer some "hypothetical goal posts":

• At the current accumulation rate of ~1,000 tonnes per year, gold would need to average about US $5,000 per ounce in ten years to represent 30% of reserves.
• If purchases accelerated toward the 2,700 tonnes per year scenario, gold would need to trade above US $6,000 per ounce to maintain equilibrium.

If Canaccord’s thought bubble turns out to be correct, it could deliver another 25–50% upside from current levels – a staggering proposition that underscores how powerful central-bank flows could become if de-dollarisation continues.

The IMF’s COFER breakdown reinforces this possibility. Gold’s share, while climbing, still lags behind the dollar’s, euro’s (16%), and even the combined non-traditional currencies (yen, sterling, yuan, Canadian and Australian dollars – together ~13%). But as the dollar share trends lower, a mere 5-percentage-point shift from USD holdings into gold could equate to over US$600 billion of incremental demand, or about 5,000 tonnes – roughly two years of mine output at current prices.

The trend is your friend – for now…

Gold’s extraordinary 18-month ascent rests on multiple macroeconomic pillars: Low real yields, geopolitical anxiety, fiscal excess, and the waning prestige of the dollar. Yet it’s the behaviour of central banks that increasingly sets the tone. Their actions are deliberate, opaque, and often politically motivated, making them powerful but unpredictable participants in the market.

If the de-dollarisation trend deepens and central banks continue to exchange dollars for shiny, yellow metal, this gold bull market may only be in its infancy. Still, no trend lasts forever. Gold’s glittering run could yet face its own reckoning if the same macroeconomic winds that created it shift – and history suggests they could reverse rapidly and without warning.

Five warning signals to watch:

• Resurgent real interest rates – if the Fed remains cautious while inflation cools, real yields could rise and dull gold’s shine (hmm… this one seems to be in play 🤔).
• A stronger US dollar if US growth outpaces the rest of the world, capital flows into US assets could lift the dollar and weigh on gold (not a major threat for now, given recent US economic data and the DXY’s long-term downtrend…).
• Improved fiscal discipline or reduced geopolitical risk, lowering demand for safe havens (Ha! US government shutdown, anyone? Not likely any time soon…)
• A slowdown or reversal in central-bank buying, particularly from China or emerging markets (a big question mark – data from the IMF and World Gold Council will be key here…)
• Technological or alternative-asset competition, such as tokenised reserves or renewed enthusiasm for cryptocurrencies (i.e. Bitcoin’s “digital gold” narrative makes a comeback…)

For now, though, the momentum is unmistakably bullish. Gold has reclaimed its monetary relevance not because investors suddenly fell in love with it, but because central banks did.

References:

• Canaccord Genuity, “The week in gold: Economic fog” – 6 Oct 2025
• IMF, “IMF Data Brief: Currency Composition of Official Foreign Exchange Reserves” – 2 Oct 2025