Why gold is more than a safe haven to central banks

Our 2025 Central Bank Gold Reserves Survey shows strong indications that gold will remain a key reserve asset over the coming 12 months. 95% of reserve managers surveyed expect central banks to continue increasing their gold holdings, while 43% actively plan to add to their gold reserves.

The survey booked record highs in both buying sentiment and survey participation with 73 central bank respondents representing half of the global central bank community, our highest level of engagement since the survey began eight years ago.

This paints a bullish picture for central banks that account for 20% of annual physical gold demand and have been net buyers for 15 years. Purchases have exceeded 1,000 tonnes for the third consecutive year – well beyond the 400–500 tonne average logged by central banks over the previous decade.

With the overwhelming majority expecting buying momentum to continue, and most seeing the US dollar becoming a smaller proportion of global reserve assets, we believe the survey further affirms gold’s status as a strategically important asset supporting financial system stability.

Chart 1: How do you expect your institution’s gold reserves to change over the next 12 months?

No surveyed central bank plans to reduce its gold exposure

Conducted between February and May this year, the survey reveals an increasingly unified view among central bankers: gold is not just a safe haven, but a strategic cornerstone. The 43% of reserve manager who expect their own gold holdings to rise in the next 12 months rose 29% since last year, and notably, no surveyed central bank has plans to reduce gold exposure.

Unsurprisingly, the macro backdrop is a major driver behind gold's appeal. When asked what issues are most relevant to reserve management, 93% of respondents cited interest rate levels, inflation, and geopolitical instability. Potential trade conflicts and tariffs, newly introduced as a survey category this year, ranked fourth overall and were of greater concern to EMDEs (69%) than to advanced economies (40%).

Conviction in gold is especially pronounced among central banks in emerging markets and developing economies (EMDEs). Nearly half of EMDE respondents expect to increase their gold reserves, compared to a more conservative stance from those in developed markets. Geopolitical hedging and portfolio diversification loom largest for EMDE reserve managers.

Chart 2: What topics are relevant for your reserve management decisions?

Interestingly, advanced economies rank ESG issues as the third most important consideration for reserve management decisions, on equal footing with inflation, behind interest rates. Given strong buying, this indicates a strong level of comfort with gold’s ESG footprint and the gold sector’s commitment to responsible gold mining and distribution.

Why do central banks favour gold?

Three key drivers of central bank gold buying:

1. gold’s historical performance during times of crisis;
2. its effectiveness as a diversifier and long-term store of value; and
3. its store of value function as an inflation hedge.

85% of respondents cited historical performance of gold during economic downturns as a key reason for their reserve allocation decisions. 81% said diversification benefits, and 80% pointed to its role as a store of value.

The survey found growing disillusionment with traditional reserve currencies, which is driving more domestically held gold in local currencies. While the US dollar still dominates global reserve portfolios, 73% of central banks now anticipate a moderate or significant reduction in USD holdings over the next five years. At the same time, respondents expect increased allocations to the euro, renminbi, as well as gold, signalling a slow but steady shift of central banks’ portfolio allocation.

One respondent noted that, while the US dollar remains deeply entrenched due to the strength of its financial markets and legal institutions, “protectionist measures such as tariffs are nudging reserve managers toward diversification,” especially in politically non-aligned nations.

Active management of gold ticks up

The survey also found a notable increase in the number of central banks that actively manage their gold reserves, rising to 44% this year from 37% in 2024 – another new high since we began collecting this data.

While return enhancement remains the primary objective, mostly through gold lending and swaps, risk management has overtaken tactical trading as the second most cited reason for active management. This highlights gold’s evolving role as a stabiliser within the broader portfolio.

Interestingly, 75% of central banks continue to manage gold reserves separately from other assets, up from 67% in 2024. When asked why, most respondents pointed to gold’s strategic significance and distinct accounting treatments. Among advanced economies, its historical legacy status is another key reason.

Chart 3: How relevant are the following factors in your organisation’s decision to hold gold?

Shifts in custody and storage

There is also a geographical shift underway in how and where gold is stored. While the Bank of England remains the most preferred vaulting location (selected by 64% of respondents), the share of central banks using domestic storage has jumped to 59% this year from 41% in 2024. But only 7% plan to increase domestic storage further in the coming year, suggesting that the current level of domestic holdings may be nearing a peak.

Good Delivery Bars are the preferred option when buying and holding physical gold.

Interestingly, the share of respondents who prefer not to disclose their vaulting arrangements fell dramatically, indicating a broader trend toward transparency in reserve management practices.

Gold affirms its place in a multipolar world

Central banks are not only increasing their gold allocations but also becoming more strategic and intentional about how and why they hold gold, reaffirming a trend that has been building for nearly a decade.

The ongoing rotation away from the US dollar, the drive to hedge against rising political and economic risks, and the commitment to building more resilient reserve portfolios all point toward gold.

As one central bank respondent said: 

“The uncertainty and volatility playing out in markets is driving investors and central banks to pick up gold investments to hedge against these unpredictable conditions.”

Gold’s role as a neutral, liquid, and resilient reserve asset that carries no third-party liability appears more vital as central banks navigate a multipolar financial landscape that continues to challenge traditional assumptions around currency stability, sovereign credit and global trade.