Central Banks Expected to Boost Gold Reserves as Dollar Declines

The World Gold Council (WGC) has reported an anticipated increase in gold reserves among central banks globally over the next year, driven by ongoing macroeconomic and political uncertainties despite high gold prices. According to a survey conducted from February to April, 29% of central banks expect their own gold reserves to rise within the next 12 months, the highest percentage since the WGC began the survey in 2018. Additionally, 81% of respondents believe global central bank gold reserves will increase in the coming year, up from 71% the previous year.

The survey, which included responses from 70 central banks, indicates a growing confidence in gold as a long-term store of value, an inflation hedge, and an effective portfolio diversifier. Emerging markets and developing economies show particular interest, with 57% expecting a larger proportion of gold in their reserves over the next five years. The Bank of England remains the most popular storage location, with 55% of respondents indicating it as their choice. This trend underscores a shift in the perception of the US dollar's role in global reserves, with concerns over its future stability.