Why in news?
The World Gold Council (WGC) released its 2026 central bank gold reserves survey in mid‑June. The survey reveals that central banks remain bullish on gold, with many planning to increase their holdings amid economic uncertainty and shifting global reserve currencies.
Background
Since the 2008 financial crisis central banks have been net buyers of gold, valuing the metal as a safe‑haven asset. Gold serves as a long‑term store of value, a hedge against inflation and a diversification tool in official reserves. Emerging market economies have led the buying spree, but interest has grown among advanced economies as well.
Key findings of the 2026 survey
- Global outlook: About 89 percent of central bank respondents expect global gold reserves to increase in the coming year.
- Own purchases: A record 45 percent plan to increase their own gold reserves, up from 43 percent in 2025.
- Reasons for buying: Respondents cite gold’s strong performance during crises, its role as a long‑term store of value and an inflation hedge, and its ability to diversify away from the US dollar.
- Reserve currency trends: About 74 percent of respondents expect the share of the US dollar in global reserves to decline over the next five years.
- Funding sources: Central banks plan to fund purchases through domestic resources, foreign exchange reserves or sales of other assets.
- Storage preferences: The Bank of England remains the most popular storage location, though many banks are diversifying storage across multiple jurisdictions.
Conclusion
The WGC survey shows that gold remains a key asset for central banks. Expectations of continued gold buying, coupled with concerns about the dominance of the US dollar, suggest that gold’s role in the international monetary system could expand in the coming years.