Central Bank expects to exchange more US dollar reserves for gold
Around the second central bank in the Global South plans to expand its own gold reserves over the next 12 months, with new data being shown and the US dollar being the most likely to pay the price of the shift.
Results from Central Bank Gold Reserve Survey 2025 Published On Tuesday, the World Gold Council said that geopolitical instability and Potential trade disputes The main reason for the emerging economy is heading gold At a much faster rate than an advanced economy.
We asked more broadly about their expectations about how their international peers will behave over the next 12 months. Of the 15 central banks from the developed economy, 58 central banks from emerging markets and dynamic economies, or EMDE, 95% expected the overall safe to increase in the next 12 months.
This helps explain why precious metals are close to their physical storage costs despite their physical storage costs and lack of other assets and other assets. April’s Recordon the other hand, the US dollar index is Near the lowest level in three years.
“Uncertainty caused by tariffs implemented and committed by the US regarding trade policy over recent periods could reduce interest on US dollars and US dollar religious assets as reserve currencies,” an anonymous central bank was quoted as saying in the report.
Of all institutions voted, 48% of the Global South expected their gold reserves to be just 21% compared to just 21% of the developed economy. Respondents discussed Decommunity-driven trends in favour of a transition to money It will continue due to increased tariffs and trade protectionism, but the decline will likely be gradual due to deep US financial markets, relatively strong legal institutions, and the apparent lack of replacement.
Tariffs raise concerns about safe haven status on US dollars and Treasury bonds
In 2024, the central bank purchased 1,045 metres of gold, accounting for about a fifth of global demand. This has accumulated over 1,000 tons for the third consecutive year, a sharp rise from an average of 400-500 tons over the past decade, according to WGC figures.
According to the survey, 72% of all respondents believe that the gold reserves held by global central banks will increase moderately over the next five years, compared to 66% in the previous year. Another 4% of respondents came from an economy that is not fully promoted and predicted profits were important.
“Central banks are expected to continue buying gold as they are looking for ways to reduce their dependence on USD,” one central bank responded in a survey. “Recent market developments on tariffs have raised questions about the safe state of USD/UST, but have strengthened that of gold.”
By comparison, 45% expect a moderate decline in US dollar holdings over the same period. This represents an improvement over the previous year of 49%, but the reply dollar has a sharp rise in a significant decline.
43% share of the dollar in global central bank reserve assets is expected to decline
The most striking differences in the response between the developed economy and the Global South are related to the trends of decooperativeness and how big a role geopolitical tensions play in fostering it.
When asked how much of the global total reserves would be sent five years later, central banks from non-advanced economies were expected to drop slightly from their current 43% share than their peers in developed economies.
For comparison, gold only accounted for 19% of the total reserves, with 15% allocated in euros and 2% allocated in Chinese yuan.
Among those who expected no change in their share of dollar-induced reserves, the relationship was reversed.
“This resonates with the recent trends in reported central bank holdings, where we see a stronger appetite for the accumulation of gold from central banks (embedded markets and dynamic economies),” concluded the World Gold Council.