Central bank gold buying surges to record 45% as de-dollarization accelerates

A record 45% of central banks expect to increase their gold holdings over the next 12 months, the World Gold Council's 2026 survey showed, as reserve managers accelerate a shift away from the US dollar that Rabobank analysts say will structurally support bullion prices.

"Central banks are valuing more than ever gold's performance during times of crisis and its role as a long-term store of value," Shaokai Fan, Global Head of Central Banks at the World Gold Council, said in an interview. "The base on which central banks are buying is expanding."

The survey, which drew a record 76 responses between Feb. 5 and May 19, showed 89% of reserve managers expect global central bank gold holdings to rise over the next year. Central banks have accumulated an average of 1,000 metric tons annually over the past four years, double the pace of the prior decade. A separate 74% of respondents said they expect the US dollar's share of global reserves to decline over the next five years, while 84% said gold's share will increase.

The findings show a transformation in reserve management that has made the official sector the most consistent source of gold demand. With the US and Iran agreeing June 15 to end their conflict and reopen the Strait of Hormuz, Barclays analysts said gold's structural drivers — persistent inflation, policy uncertainty and reserve diversification — will reassert themselves. Barclays forecasts gold at $4,791 an ounce in 2026 and $4,900 in 2027, with fair value currently at $4,150.

The survey's findings come at a historic moment for the precious metal. Gold recently surpassed US Treasuries to become the world's largest reserve asset, the WGC noted, reflecting a dramatic shift in how official institutions manage their wealth. Central banks have accumulated an average of 1,000 metric tons annually over the past four years, more than double the 500-ton average of the preceding decade.

Fan said interest in gold is spreading beyond traditional buyers. Countries such as Indonesia, Malaysia, Guatemala and El Salvador have recently entered the market or resumed purchases after years of inactivity. Even among advanced-economy central banks, 18% said they expect to increase gold holdings over the next year.

De-dollarization drives reserve diversification

The survey showed that reserve diversification remains the primary motivation for buying gold, cited by 31 of the 34 central banks planning to increase their reserves. A record 90% of respondents cited gold's performance during times of crisis as a key reason for holding the metal, while 84% pointed to its role as a long-term store of value and inflation hedge. Among emerging market and developing economy respondents, 85% favored gold as a geopolitical risk hedge.

The shift away from dollar-denominated assets is also visible in vaulting patterns. Some 9% of respondents said they had increased domestic storage in the past 12 months, up from 5% last year, while 10% diversified their overseas storage locations, up from 2%. The Bank of England remains the most popular vaulting location at 57%, followed by domestic storage at 49% and the Bank for International Settlements at 16%.

Rabobank analysts said in a research note Tuesday that sustained central bank buying and de-dollarization trends are structurally supportive for gold prices. The combination of persistent inflation, policy uncertainty and continued reserve diversification creates a favorable backdrop for bullion, they said, even after gold's 26% decline from its January peak to its June trough during the Iran conflict.

Barclays estimates that every percentage-point increase in inflation gives gold a 5% uplift, and the inflationary impulse from higher energy prices during the Hormuz crisis will be supportive. The bank calculated gold's fair value at $4,150 an ounce and maintained its 2026 and 2027 price forecasts at $4,791 and $4,900 respectively. The analysts also recommended exposure to gold mining stocks including Newmont, Agnico Eagle and Fresnillo.

"Recent price gyrations notwithstanding, if there is a period when gold ought to be trading at a premium, it is now," Barclays' cross-asset research team led by Lefteris Farmakis and Themistoklis Fiotakis said.

The implications extend beyond gold. A sustained shift away from dollar reserves could pressure the US dollar index over time, while increased gold allocations by central banks reduce the supply available to private investors and ETF buyers. Metals Focus projects central bank gold demand will slow 15% year-on-year in 2026 in tonnage terms but remain above pre-2022 levels.

This article is for informational purposes only and does not constitute investment advice.