Central bank reserves: the growing importance of gold
News Arnulf Hinkel, Financial Journalist – 10.11.2025
Central banks worldwide have been net buyers of gold for the past 15 years. A few years ago, central bank purchases rose sharply, and many financial media outlets considered the term ‘buying spree’ more than appropriate. Monthly increases in gold reserves slowed intermittently, mainly due to the high gold price. In September 2025, however, central bank demand resurged. A 79 percent increase in gold purchases month on month totaling 50 percent above the 12-month average is a volume again worthy of the term ‘buying spree’. Also by September, gold had replaced the globally popular US Treasury bonds as the largest central bank reserve.
Greater confidence in gold than in US Treasuries and dollar
Currently, gold accounts for a 27 percent share of global central bank reserve portfolios, while US Treasuries make up only 25 percent, suggesting a loss of confidence in the latter. At the same time, emerging economies in particular are trying to achieve greater independence from the US dollar, the traditional reserve currency. The results of the World Gold Council’s 2025 central bank survey show that this change in central bank strategy might not be solely a reaction to the current geopolitical crises. When asked whether they expect central banks to increase their gold reserves over the next five years, nearly 76 percent answered in the affirmative, and 73 percent expect a reduction in the US dollar as a reserve currency during this period.
Signal effect for institutional and private Investors
The fact that central banks are continuously expanding their gold reserves not only means that these institutions trust in the precious metal’s function as a store of value. It also has a direct impact on global gold demand and thus the gold price. In recent years, central banks have been responsible for more than 20 percent of total gold purchases. Various studies show that institutional and private investors can optimize their portfolios with even small allocations of gold of 5 to 10 percent.
