Everyone wants a piece of gold, even central banks around the world. Across continents, monetary authorities are quietly building their gold stockpiles at the fastest pace in decades.
This isn’t about nostalgia for the gold standard or a hedge against passing market fears. It’s about strategy.
In a world of geopolitical realignments, unpredictable bond yields and uneven economic growth, gold is once again being treated as the ultimate store of value.
The shift is rooted in what economists call “structural volatility.” According to the Bank for International Settlements (BIS), global growth in advanced economies is now stuck below 2%, while inflation remains stubborn even after years of aggressive rate hikes.
In this environment, returns from traditional safe assets—such as sovereign bonds—have become unreliable.
When central banks lose confidence in fiat assets, they look for something more tangible.
Gold, unlike a bond or currency, carries no counterparty risk. What this means is that it cannot default, be debased by inflation, or be frozen by sanctions.
That resilience explains why gold is re-emerging as a cornerstone of reserve management rather than a relic of the past.
Manoranjan Sharma, Chief Economist at Informerics Ratings, explained that the surge in central bank gold accumulation goes beyond traditional safe-haven motives.
“Much of this accumulation is driven by de-dollarisation efforts, particularly in emerging markets such as China, India, Russia, Trkiye, and several Middle Eastern economies,” he said.
“Holding gold offers insulation from sanctions, strengthens monetary credibility, enhances financial stability, and provides flexibility for independent monetary policy in an increasingly multipolar financial order,” Sharma explained.
Sharma added that gold also serves as protection against financial repression and the uncertainties of the evolving digital currency landscape.
In other words, this is a deliberate, structural move and not a short-term hedge.
Central banks are expected to collectively purchase around 900 tonnes of gold in 2025, marking the fourth consecutive year of above-average buying.
The World Gold Council’s Central Bank Gold Reserves Survey 2025 added another striking detail, with 76% of central banks expecting to hold a higher proportion of gold five years from now, while 73% expect the US dollar’s share in global reserves to decline.
“This persistent official buying has created a structural floor under gold prices, even amid higher global interest rates,” Sharma noted. “Central bank purchases reinforce gold’s reputation as a dependable long-term asset, prompting both institutional and retail investors to expand exposure through ETFs, mining equities, and sovereign gold bonds.”
The US dollar still accounts for roughly 58% of total global reserves, according to the IMF’s COFER database, but that share has been steadily eroding.
The dollar’s dominance is challenged by political factors as much as economic ones.
Recent financial sanctions on Russia and the threat of similar measures against other nations have made several governments nervous about holding large amounts of US assets.
Gold, by contrast, sits outside that system. It can be stored domestically, traded globally, and isn’t tied to any one nation’s policies.
That makes it particularly appealing to emerging-market economies that want to insulate themselves from Western monetary power.
No country illustrates this shift better than China. The People’s Bank of China has been one of the most aggressive buyers of gold in recent years, adding to its reserves for 18 straight months until mid-2025.
Economists describe China’s gold buying as part of a broader strategy to safeguard against potential US sanctions and to support non-dollar trade within the BRICS+ bloc.
As Apollo Global’s chief economist Torsten Slok put it recently, “China’s buying is the linchpin — its central bank, traders, and households together are transforming gold from a hedge into a hard-power instrument.”
Beijing’s actions have ripple effects. When the world’s second-largest economy keeps absorbing gold, prices stay elevated, even as retail investors or jewellers step back.
Sharma highlighted that the impact of sustained central bank demand goes beyond prices alone. “Whereas price movements were once dominated by speculative flows and ETFs, official sector accumulation now acts as a stabilising force, rendering gold more resilient and less cyclical,” he said.
“With mine output growth constrained and recycling limited, robust official buying tightens physical markets, often widening premiums in key Asian hubs such as Shanghai and Mumbai.”
This ongoing accumulation signifies a paradigm shift in central banking philosophy, according to Sharma. “It reflects both geopolitical realignment and the re-emergence of gold as a strategic reserve asset,” he said.
Central banks are reassessing currency risk, inflation protection, and long-term value preservation.
Gold is being repositioned as a core pillar of monetary sovereignty in an era defined by inflation volatility, digital currency evolution, and intensifying geopolitical contestation.
Gold has been one of 2025’s standout assets. Prices surged by as much as 65% year-to-date, briefly breaching $4,000 per ounce in October before settling slightly lower.
The World Gold Council called it the strongest annual rally since 1979, driven by persistent inflation, geopolitical fragmentation, and what some analysts call “institutional repositioning,” which is also a code for central banks diversifying away from fiat.
Analysts at Morgan Stanley expect the rally to continue into 2026, projecting prices could touch $4,900 per ounce next year. Goldman Sachs has described this as the “debasement trade,” in which both gold and bitcoin gain favour when investors lose faith in traditional currencies.
The implications run deeper than market charts. With annual global gold production stuck around 4,000 tonnes, the surge in central-bank demand tightens supply and adds a political dimension to the metal.
For investors, the takeaway is simple: gold’s recent surge isn’t just sentiment-driven. When the world’s largest financial institutions are stockpiling the same asset, it creates a structural floor under prices.
For policymakers, it’s a reminder that global trust in fiat money, especially in the dollar, is weakening. The yellow metal, once dismissed as a relic of the past, is back at the centre of the global financial map.
The world may no longer run on a gold standard, but in 2025, gold is clearly setting the standard for trust.