Historic shift to gold by central banks: A first in 30 years

The global economy has crossed a new threshold with the shift in central banks' reserve preferences. Geopolitical tensions and financial sanctions, which have increased in recent years, have brought gold to the forefront while weakening the weight of the dollar. According to figures released by Bloomberg, gold reserves held by central banks globally have reached approximately 4 trillion dollars, exceeding the 3.9 trillion dollar stock in US Treasury bonds.

In the past, US bonds were the largest asset in central bank vaults, while gold's share was at a modest level of 9 percent. However, in recent years, the share of gold in reserves has risen to 24 percent, while the share of US bonds has fallen to 21 percent.

REASONS BEHIND THE STRATEGY CHANGE

Following the outbreak of the war between Russia and Ukraine, the move by Western countries to freeze approximately 300 billion dollars in assets belonging to the Central Bank of Russia accelerated the search for safe havens in reserve management by central banks. Gold, which remains independent of sanctions, has emerged as an alternative to the US dollar, and large-scale purchases have begun globally.

According to data published by the World Gold Council, central banks purchased 863 tons of gold in 2025, breaking a 10-year record. This amount is approximately double the ten-year average and clearly demonstrates the growing interest of central banks.

Poland made the most notable purchase; by adding 102 tons to its reserves, the country brought its total gold amount to 550 tons. The People's Bank of China also reported an official purchase of 27 tons, but the World Gold Council announced that 57 percent of the total reported purchases were not actually disclosed and the real amount could be much higher.

INTEREST IN GOLD CONTINUES TO GROW

Central banks' future expectations are also in favor of gold. According to the World Gold Council's 2025 survey, the majority of central banks are not considering reducing gold in their reserves in the coming period, and expectations for a decline in the global weight of the dollar are strengthening.

Over the last five years, the share of the US dollar in reserves has fallen from 72 percent to 58 percent. This reduction also makes low-interest borrowing opportunities in US financial markets more difficult.

At the same time, gold recorded its best annual performance since 1979, showing an increase of approximately 70 percent last year. The ongoing purchases by institutions and central banks played a major role in this rise.

The statements in this news report do not constitute investment advice.

News Source: 12punto