Central Banks Expect Gold Reserves to Increase Against a Backdrop of Geopolitical and Economic Uncertainty | By Andrew Naylor, Head of Middle East and Public Policy, World Gold Council

Date Posted:Mon, 7th Jul 2025

The World Gold Council established an office in Dubai two years ago. And in the two years we have been here the gold price has increased by 70%. There are lots of factors at play, but one of the most important has been central bank and official sector buying. Central banks account for approximately 20% of the annual demand for gold, and in the last three years have bought c1000tonnes.

To put that figure into context, the entire consumption of the Middle East (the third largest market for gold) was 267tonnes last year. The other sectors of demand are jewellery (33%), institutional and retail investment (40%), and technology (7%).

The World Gold Council’s role in the UAE

The World Gold Council is the international market development organization for gold.

We are a membership organisation that champions the role gold plays as a strategic asset, shaping the future of a responsible and accessible gold supply chain. We have a broad programme in the UAE (now the second largest physical gold trading hub globally), including strengthening AML/CFT compliance in the gold market, enhancing consumer protection, and providing training to the gold industry.

We also conduct and publish research and our recently released annual survey of central banks is a key publication to understand the behaviour and drivers of central bank demand for gold.

Insights from the 2025 Central Banks Gold Reserves Survey

In the survey, more than nine in ten (95%) reserve managers indicated that they expect central banks to continue increasing their gold holdings in the next 12 months, according to our 2025 data.

This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings.

The 2025 Central Banks Gold Reserves (CBGR) survey, which collected data from a record 73 of the world’s central banks, also finds that nearly 43% of central banks plan to add to their own gold reserves within the next year.

Reserve managers' favourable view of gold persists even in the face of record-high gold prices and 15 successive years of central bank gold buying.

Shifts in motivations for holding gold

Gold continues to be used as a safe-haven asset to help mitigate risks as ongoing economic and geopolitical uncertainty continues to weigh on reserve managers.

The top three current motivations for holding the asset have shifted to its long-term store of value (80%), its role as an effective portfolio diversifier (81%), and its performance in times of crisis (85%).

Central banks in emerging markets and developing economies (EMDE) have once again maintained their positive outlook for gold’s future share in reserve portfolios.

Notably, 28 out of 58 (48%) EMDE respondents thought that their own gold reserves would increase in the next 12 months, compared to 3 out of 14 (21%) of advanced economy respondents, more than last year. Although interest rate levels remained a key component of both groups’ motivators for holding gold, inflation (84%) and the geopolitical situation (81%) were top of mind for EMDEs, while 67% and 60% of advanced economy respondents felt the same.

Trends in storage and reserve diversification

Notably, more central banks are increasingly storing gold domestically: 59% said they have gold in domestic storage, up from 41% in 2024.

Additionally, most respondents (73%) see moderately or significantly lower US dollar holdings within global reserves over the next five years.

However, respondents also believe that other currencies, such as the euro and renminbi, as well as gold, will increase their share over the same period.

Historical context: Lessons from the 2008 financial crisis

The change in central banks’ attitude towards gold was precipitated by the 2008 Global Financial Crisis.

The crisis exposed vulnerabilities in the global financial system and raised concerns over the extent to which the global economic boom was built on debt. Adding to the woes, the Eurozone debt crisis and the downgrade of US’ credit rating also rattled investor confidence in the sovereign debt market.

The introduction of large-scale quantitative easing and the resulting low-rate environment brought to the fore the argument for greater diversification from traditional reserve assets and currencies.

In addition, growing geopolitical tensions prompted some countries to consider alternatives to the US dollar, even adopting de-dollarisation policies to reduce their dependence on the US dollar.

Looking ahead

What is clear from the research is that central bank interest in gold will likely persist, and will continue to be a key driver of gold’s performance going forward.

There are other factors, and we have developed a model called GRAM – the Gold Return Attribution Model – to develop a deeper understanding of the relationship between the gold price and its key drivers.

The survey, and all of our research and tools, can be freely access on www.goldhub.com

Author: Andrew Naylor, Head of Middle East and Public Policy, World Gold Council

[email protected]