Before the last global gold standard – the Bretton Woods system – was abandoned in 1973, central banks had to hold gold reserves to back their fiat currencies and help stabilize the global monetary system. According to the World Gold Council, the industry body representing the gold sector, central bank vaults held 36,606 tons of gold in 1970. By the end of 2025, that figure stood at 36,535 tons – barely less. So what makes central banks hold such large amounts of the precious metal even after the dollar's peg to gold ended – and why have many of them expanded their gold reserves even further in recent years?
Interest rates and geopolitical and economic stability
According to the results of a global central bank survey conducted in mid-June 2026 on behalf of the World Gold Council, 92 percent of the institutions surveyed named interest rates as the most important factor in managing currency reserves. Close behind this year were geopolitical instability at 88 percent and inflation concerns at 79 percent. Other factors cited included potential trade wars and shifts in the global balance of economic power.
Gold's long-term value ranks among the top reasons to buy
Looking at the factors that are generally decisive for building and expanding gold reserves, the central bankers surveyed ranked three motives highest: 90 percent named gold's performance during times of crisis as very important or important, 84 percent cited its significant role in portfolio diversification, and 82 percent pointed to its function as a long-term store of value. Other key motives for expanding gold reserves included protection against geopolitical risks and the fact that gold, as an asset class, carries no complete default risk. All of this shows that central banks still consider gold indispensable for hedging against currency fluctuations today. In recent years, emerging markets have also added another motive: reducing their dependence on the US dollar.