More central banks signal plans to increase gold holdings, survey shows

[LONDON] A record 45 per cent of the reserve managers surveyed by the World Gold Council (WGC), up two percentage points from a year ago, expect to increase their own institutions’ gold holdings over the next 12 months, the international organisation said on Tuesday (Jun 16).

The majority – 54 per cent of 74 central banks that responded to the WGC’s annual survey, conducted between Feb 5 and May 19 – said their holdings would remain unchanged, while 1 per cent anticipated a decline.

Most responses were received after the start of the Middle East conflict in late February, which triggered a rally in oil prices and drove gold prices down.

Central banks remain keen on gold, and the recent price fall has not changed their minds, said Shaokai Fan, head of the central banks sector at the WGC.

The US and Iran agreed over the weekend on terms to end their war and reopen the Strait of Hormuz, prompting a 3 per cent rise in gold prices on Monday.

Gold demand from central banks will slow down by 15 per cent year on year in 2026 in tonnage terms, according to consultancy Metals Focus, but remain above pre-2022 levels, a consistently supportive factor for the market.

The WGC said 93 per cent of respondents reported already holding gold, up from 81 per cent a year ago.

Among the drivers for gold ownership, a record 90 per cent of respondents cited its performance during times of crisis. The top answers also included long-term store of value and portfolio diversification. Gold’s role as a geopolitical risk hedge was favoured among emerging market and developing economy respondents (85 per cent).

As some central banks continued relocating their gold, 9 per cent of respondents said they had increased domestic storage in the past 12 months, up from 5 per cent last year, and 10 per cent said they had diversified their overseas storage locations, up from 2 per cent.

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Within 12 months, 7 per cent plan to increase domestic storage and 9 per cent plan to diversify overseas locations.

The WGC did not ask central banks to specify where their gold came from in cases of repatriation.

However, its research showed that the Bank of England remains the most popular vaulting location, followed by domestic storage and the Bank for International Settlements. REUTERS