The World Gold Council (WGC) has surveyed global central banks and found out that 45% of them plan to increase their gold reserves in the coming 12 months.
The majority of the remaining respondents indicated they expect no change, while 1% expect their institution’s gold reserves to decrease.
The survey has also discovered that central banks have accumulated an average of 1000 tonnes of gold over the past four years, up significantly from the 500 tonnes in the previous decade.
"This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers," WGC said.
The survey outlined a number of key factors for holding gold reserves, such as gold’s performance during times of crisis, portfolio diversification and inflation hedging. In addition, gold as a geopolitical risk hedge and gold as part of a reserve diversification policy also feature as key reasons for increasing allocations to gold.
The majority of respondents (74%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi will remain unchanged over the same period, while gold holdings will increase.
Additionally, the WGC says the Bank of England remains the most popular vaulting location among respondents at 57%, though central banks continue to diversify their storage across multiple locations.
Theodor Lisovoy, Managing Editor, Rough&Polished
