Since the end of the Bretton Woods system, the last gold standard, central banks have not held as much gold as part of their foreign currency reserves as they have in recent years. From 2020 to the present, central banks worldwide have continuously expanded their gold reserves and have been accounting for around 20 percent of annual global gold demand since 2022. During this period, gold has also replaced US Treasury Bonds as the largest share of central bank reserves in terms of value and serves many countries in their effort to become less dependent on the US dollar. Since 2020, the precious metal has gained 265 percent in value, forcing numerous central banks to revalue their foreign currency reserves.
Some FX reserves consist largely of gold
In the US and Germany, gold accounts for more than two-thirds of total foreign exchange reserves: in 2025, the Bundesbank (the German central bank) reported the share of gold holdings at 75.8 percent, while the US Federal Reserve reported as much as 76.4 percent, corresponding to 8,133 tons of gold. The Fed therefore holds the largest gold reserves globally. The FX reserves of the Italian and French central banks also consist predominantly of gold, reflecting the institutions’ confidence in the precious metal as a safe haven and store of value, also confirmed by the results of the World Gold Council’s annual central bank survey.
These central banks have increased their gold reserves the most
Countries such as China and India, where gold traditionally accounts for a relatively small portion of foreign exchange reserves, have made massive purchases over the past five years. China alone has acquired over 357 tons of gold since 2020, India 245 tons. In Europe, two countries in particular have significantly upped their gold reserves since 2000: Poland with 314 tons and Turkey with 251 tons of gold. While geopolitical considerations are the primary focus of the Polish central bank’s expansion of its gold reserves, in Turkey it is primarily high inflation and the fight against the currency crisis which are fueling gold purchases.