Central banks worldwide are increasingly favoring gold over the dollar in their reserves. According to the World Gold Council’s 2026 survey, 89% expect global official gold holdings to rise within a year, while 45% plan to increase their own gold stocks. Meanwhile, 74% foresee the dollar’s share of global reserves declining over the next five years.
The shift comes amid expectations of higher interest rates from the U.S. Federal Reserve and the European Central Bank, alongside geopolitical tensions and efforts to diversify reserves. IMF data shows the dollar remains dominant at 56.77% of global foreign exchange reserves in late 2025, but “other currencies” rose to 6.13%.
Market strategist Ahmed Asiri told Al Jazeera Net that this reflects a long-term transformation in sovereign asset management rather than a collapse of the dollar’s role. He noted that sanctions, trade realignments, and financial risks are driving central banks—especially in emerging economies—to reduce concentration in a single asset.
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Gold is seen as a hedge against inflation, currency exposure, and market volatility. Of 34 central banks planning to buy gold, most cited diversification, inflation protection, and rising risks in reserve-currency economies. Asiri emphasized gold’s unique qualities: no credit risk, long-term value retention, and strong performance during crises.
Recent moves highlight the trend: China expanded gold reserves for the 19th consecutive month in May, reaching 2,332 tons. The Czech National Bank boosted holdings from 12 tons in 2022 to over 80 tons by May 2026, aiming for 100 tons by 2028. Poland approved a plan to raise reserves to 700 tons, placing it among the world’s top ten holders.
Funding strategies vary: half of central banks plan to use local currency purchases, while 38% will sell existing assets. Some are diversifying storage locations, reflecting heightened concern over asset security and sovereignty.
Despite the dollar’s liquidity and depth, the survey suggests gold is becoming a strategic tool for long-term risk management, particularly in emerging markets. As global inflation, interest rate volatility, and geopolitical uncertainty persist, gold’s role as a reserve asset is set to expand.