2025 survey of banks shows positive sentiments of the precious metal, and they will continue to buy across the globe

According to WGC’s 2025 Central Bank Gold Reserves Survey, gold sentiment within the central banking community remains positive.
Central banks across the world are upbeat about gold prospects for the next 12 months. A survey conducted by the World Gold Council (WGC) showed that most of the banks expect gold reserves to increase over the next 12 months, even as their holdings in the precious metal will rise.

The WGC said it reflected sustained confidence in the precious metal’s strategic role amid evolving geopolitical and macroeconomic dynamics.

According to WGC’s 2025 Central Bank Gold Reserves Survey, of 73 responses, 95 per cent of the respondents said global central bank gold reserves will increase. In the previous survey, 81 per cent believed the gold reserves would improve in 2024.

Driving factors
“A record 43 per cent (29 per cent in 2024)of respondents also believe that their own gold reserves will increase over the same period, and none anticipate a decline in gold holdings,” the WGC said, releasing the survey.

Gold’s performance during times of crisis, portfolio diversification and inflation hedging are some key themes driving plans to accumulate more gold over the coming year. These characteristics are key reasons why central banks hold strategic gold allocations, it said.

Central banks’ purchases are one of the reasons for gold to gain over 30 per cent in 2024 and about 30 per cent so far in 2025. On Tuesday, spot gold was quoted at $3,386.50 an ounce, as of 1830 hours IST. US gold futures were down at $3,465.

In India, domestic spot gold was quoted at ₹99,150 per 10 gm, down from ₹99,373 on Monday. On MCX, gold August futures were last quoted at ₹99,355 per 10 gm at the end of the first session.

Continuation of trend
“Our survey shows a continuation of the trend uncovered in previous years: central banks see gold making up a growing share of their reserve portfolios. 76 per cent of respondents believe that gold will hold a (moderately or significantly) higher share of total reserves five years from now, up from 69 per cent last year,” the WGC said. Responses were consistent between central banks in advanced economies and emerging markets and developing economies (EMDE), with the majority anticipating that the proportion of gold held as total reserves would be moderately higher in five years.

Meanwhile, central banks are less sanguine on the US dollar. “While it maintains its position as the dominant global reserve currency, data from the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) show that its share has been on a gradual decline,” the WGC said.

The respondents of the survey said this trend will continue, with 73 per cent of them expecting its share to be lower five years from now. Both advanced economy and EMDE responses were aligned in this view.

Inflation, geopolitical crisis
The WGC said 93 per cent of the respondents indicated “interest rate levels” – on a par with last year’s survey. Other factors that respondents considered relevant include “inflation concerns” and “geopolitical instability”.

Central banks from both EMDE and advanced economies are concerned about interest rate levels, and there was divergence around inflation concerns and geopolitical instability.

“A higher percentage of EMDE respondents believe that inflation (84 per cent) and the geopolitical situation (81 per cent) remain top of minds; while among advanced economy respondents, these figures were 67 per cent and 60 per cent respectively,” it said.

While 59 per cent of total respondents indicated that “potential trade conflicts/tariffs” are relevant to their reserve management decisions, a larger percentage of these came from EMDE respondents (69 per cent) than advanced economy respondents (40 per cent).

On relevant factors in their decision to hold gold, 85 per cent of the respondents indicated that the yellow metal’s performance during times of crisis is highly or somewhat relevant to their organisation.

Similarities with 2024
The WGC said: “81 per cent of respondents also indicated that gold’s attribute as a portfolio diversifier is a relevant factor, while 80 per cent highlighted its role as a store of value. These responses reinforce gold’s appeal as a strategic reserve asset.”

The survey showed that there were similarities compared to last year’s survey. In 2024, “performance during times of crisis” was highly rated as relevant in holding gold. However, gold’s role as a “long-term store of value” was seen as more relevant to last year’s sample — and at the time, central banks across the world were battling higher inflation.

Nevertheless, consistency in the top three relevant factors shows that central banks across the board continue to recognise gold’s strategic role in risk management, the WGC said.

Courtesy: thehindubusinessline