Central banks expect their gold reserves to rise as de-dollarization continues

Central banks worldwide are showing a growing preference for gold as part of their reserve strategies, driven by ongoing efforts to reduce reliance on the US dollar—a trend known as de-dollarization. According to a recent survey conducted by the World Gold Council (WGC), 84% of participating central banks anticipate an increase in their gold holdings over the next five years. This shift reflects broader economic uncertainties and a desire for diversification amid geopolitical tensions and financial instability.

The survey, released on June 16, 2026, highlights a significant movement toward gold as a safe asset. The findings suggest that central banks are gradually replacing portions of their foreign exchange reserves—primarily held in US dollars—with gold. This transition is seen as a strategic move to hedge against currency fluctuations, inflationary pressures, and potential disruptions in international trade due to geopolitical conflicts.

The decision to prioritize gold comes amid rising concerns about the stability of the global financial system. Many central banks have expressed skepticism about the long-term viability of the dollar as the dominant reserve currency, especially following years of economic volatility, trade wars, and sanctions imposed by the United States on various nations. As a result, they are exploring alternative assets that offer greater security and independence from Western financial systems.

One notable aspect of this trend is the increased repatriation of gold reserves. The Financial Times reported that several central banks have begun moving their gold holdings back to their home countries, citing heightened global insecurity. This action is partly motivated by the desire to protect assets from political risks associated with holding bullion abroad. For instance, some nations have faced restrictions on accessing their reserves due to sanctions or diplomatic disputes, prompting them to take a more defensive stance on their reserves.

The WGC survey also revealed that the proportion of gold in central bank reserves is expected to grow steadily. While exact figures were not disclosed, the data suggests that gold’s role in the global reserve portfolio will become more prominent. This change is not limited to emerging economies; even traditionally dollar-dependent nations are reconsidering their approach to reserve management. The survey included responses from central banks across multiple continents, underscoring the widespread nature of this shift.

In addition to economic factors, the psychological appeal of gold as a store of value has played a role in its resurgence. Historically regarded as a symbol of wealth and stability, gold has regained favor during times of uncertainty. Its tangible nature and limited supply make it an attractive option for central banks seeking to insulate themselves from volatile markets.

Reactions from policymakers and economists have been largely supportive of the trend. Many analysts view the increased demand for gold as a natural response to systemic risks in the current global economy. However, some caution that while gold can provide diversification benefits, it does not generate returns like interest-bearing assets. Therefore, central banks must balance their portfolios carefully to ensure both safety and growth.

Looking ahead, the continued expansion of gold holdings by central banks is likely to influence global financial markets. As more institutional investors allocate capital to gold, its price could stabilize or even appreciate, further reinforcing its status as a cornerstone of reserve management. Meanwhile, the push for de-dollarization may lead to the emergence of new reserve currencies or alternative financial frameworks, reshaping the landscape of international finance.