A growing number of central banks are accumulating gold reserves amid geopolitical upheaval that has led them to question their reliance on the US dollar.
The erratic policymaking of President Donald Trump’s administration, especially regarding the ongoing threat of tariffs, has elevated gold’s traditional status as a neutral safe haven.
Since the ultimatum of tariffs for European countries that resisted Trump’s proposed annexation of Greenland, the price of an ounce of gold surged to $4,960 on January 22. And less than week later, prices soared above $5,000, and are even expected to break $6,000 in the longer term.
According to the World Gold Council’s Gold Demand Trends report for the third quarter of 2025, interest in gold intensified to record levels, which was attributed to the geopolitical environment and the weak dollar.
The most significant expansions of central bank reserves for the same quarter occurred in Kazakhstan, Brazil, Turkey, Guatemala, and China.
Regionally, Western European central banks hold the largest gold reserves, with 10,727 tonnes. The latest country to make a conspicuous move towards stockpiling gold reserves is the National Bank of Poland, which has increased its gold bullion holdings to around 550 tonnes.
However, despite the US dollar’s dwindling reputation, data from the International Monetary Fund suggests the greenback has not been entirely dethroned.
At the end of the second quarter of 2025, the dollar’s share of global foreign exchange reserves was 56.3%, a decrease from 57.8% at the end of the first quarter. Although by holding exchange rates constant, its share would have reduced to only 57.7%.
While this represents a decline from the 66% of central bank reserves a decade ago, the US dollar remains the dominant global currency. Meanwhile, JPMorgan Chase has forecast that the gold market will remain bullish, and central bank demand, alongside investor demand, will remain high, averaging 585 tonnes in the opening quarter of 2026.
