More central banks plan to boost gold reserves

A record 45 percent of the reserve managers surveyed by the World Gold Council, up 2 percentage points from a year ago, expect to increase their own institutions’ gold holdings over the next 12 months, the international organization said on Tuesday. The majority — 54 percent of 74 central banks that responded to the WGC’s annual survey, conducted between February 5 and May 19 — said their holdings would remain unchanged, while 1 percent anticipated a decline.

Most responses were received after the start of the Middle East conflict in late February, which triggered a rally in oil prices and drove gold prices down. Central banks remain keen on gold, and the recent price fall has not changed their minds, said Shaokai Fan, head of the central banks sector at the WGC.

The US and Iran agreed over the weekend on terms to end their war and reopen the Strait of Hormuz, prompting a 3 percent rise in gold prices on Monday. Gold demand from central banks will slow down by 15 percent year-on-year in 2026 in tonnage terms, according to consultancy Metals Focus, but remain above pre-2022 levels, a consistently supportive factor for the market.

The WGC said 93 percent of respondents reported already holding gold, up from 81 percent a year ago. Among the drivers for gold ownership, a record 90 percent of respondents cited its performance during times of crisis. The top answers also included long-term store of value and portfolio diversification. Gold’s role as a geopolitical risk hedge was favoured among emerging market and developing economy respondents (85 percent).

As some central banks continued relocating their gold, 9 percent of respondents said they had increased domestic storage in the past 12 months, up from 5 percent last year, and 10 percent said they had diversified their overseas storage locations, up from 2 percent. Within 12 months, 7 percent plan to increase domestic storage and 9 percent plan to diversify overseas locations. The WGC did not ask central banks to specify where their gold came from in cases of repatriation.

However, its research showed that the Bank of England remains the most popular vaulting location, followed by domestic storage and the Bank for International Settlements.