Gold set to gain share in forex reserves as dollar outlook dims: WGC

Gold could eat into the share of the US dollar in central bank forex holdings worldwide over the next five years, an annual World Gold Council (WGC) survey showed, underscoring a broad-based tilt toward safe-haven assets in a trading environment rocked by geopolitics and unpredictable trade tariffs. The yuan and the euro, too, might see share gains that reflect the shifting trade currents.

“Nearly half of the central bank respondents intend to increase their own gold holdings in the coming year,” said Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific (ex-China). “This is remarkable, especially considering how many record-high prices we’ve hit so far in 2025.”

Gold prices have continued to surge through this year, in part aided by institutional purchases, after a record 2024 surge.

“Notably, this reflects the current global financial and geopolitical environments,” Shaokai Fan said. “Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.”

Central banks have bulked up gold holdings in recent years amid geopolitical and economic uncertainty. WCG said that central banks accumulated over 1,000 tonne of gold in each of the last three years, up significantly from the average 400-500 tonne over the preceding decade.

Respondents to the survey, which collected data from 73 of the world’s central banks, were less sanguine about the prospects of the US dollar, which still is the world’s reserve currency and the monetary unit in which goods are priced globally.The survey also revealed that 95% of respondents believe that global central bank gold reserves will increase over the next 12 months. This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings, WGC said.While the American currency dollar maintains its position as the dominant global reserve currency, data from the International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves (COFER) shows that the dollar’s share has been on a gradual decline.

“The majority of respondents (73%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi, as well as gold, will increase over the same period,” the WCG survey said.

A Bank of Baroda May report, based on the WGC data, had shown that the gold holding by central banks climbed 4.1% annually between 2009 and 2024.

The top 10 holders are the US, Germany, Italy, France, Switzerland, Japan, Netherlands, China, Russia, and India.