Why Central Banks Are Hoarding Gold Again


Central banks now hold more than 36,000 tonnes of gold, the highest level since 1975. Over the past four years, official buyers have added an average of 1,000 tonnes annually, double the pace of the previous decade. The World Gold Council's 2026 survey, its most-attended in nine years, found a record 89% of reserve managers expect global holdings to keep growing. What's fueling this quiet accumulation, and could it last?

The shift traces back to Russia's 2022 invasion of Ukraine, when roughly $300 billion in Russian foreign assets was frozen. That single event reshaped how governments think about the safety of reserves held abroad, and gold has been the biggest beneficiary ever since.canv

Why Central Banks Hold Reserve Assets

Reserves give a country financial breathing room. Central banks lean on them to defend their currency, cushion market stress, or keep functioning when overseas borrowing turns expensive or unavailable.

Reserve portfolios typically include:

  • Government debt — chiefly US Treasuries, long viewed as the world's safest asset.
  • Foreign currency deposits — cash held with other central banks or commercial banks abroad.
  • Banknotes — physical foreign currency for immediate liquidity needs.
  • Gold — a physical, sanction-resistant store of value with no counterparty risk.


The Current Situation, and What Comes Next

Demand held strong into 2026, with a net 244 tonnes purchased in the first quarter alone, above both the prior quarter and the five-year average, even as the Iran conflict rattled markets. Uzbekistan, China, Kazakhstan and the Czech Republic were among the steadiest buyers, while Turkey pared back holdings for tactical reasons tied to short-term liquidity needs rather than a change in strategy.

Governments aren't the only ones who should be paying attention. Investors and businesses that rely on stable currencies and predictable reserve policy should watch these trends closely, since a slow-moving shift away from the US dollar can eventually filter through to exchange rates, borrowing costs and inflation.

Will Gold Keep Its Place in Official Reserves?

History offers a cautionary tale. In the 1990s, central banks sold gold freely, Australia offloaded 247 tonnes in 1997, and the UK sold 395 tonnes between 1999 and 2002, both near multi-decade price lows. Those sales look painful in hindsight; Australia's stash alone would be worth roughly ten times more today.

That memory appears to be shaping current behavior. Gold is still a modest share of most reserve portfolios overall, but the direction of travel is clear: central banks are buying, not selling, and few expect that to change soon.

Conclusion

Central banks are rebuilding gold's role in the global financial system, not out of nostalgia, but as a deliberate hedge against sanctions, currency shocks and an uncertain monetary order. The scale of buying, averaging 1,000 tonnes a year since 2022, marks one of the most significant reserve shifts in half a century.

Whether this trend continues at the same pace depends on geopolitics as much as economics. But with a record share of central banks expecting their own gold holdings to grow, gold's seat at the reserve table looks secure for the foreseeable future.

References

 


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