Central Banks Anticipate Increased Official Sector Gold Demand Despite High Prices

According to the World Gold Council's 2024 Central Banks Gold Reserves (CBGR) survey, 81% of respondents expect reserve managers to increase their gold holdings in the next 12 months, the highest recorded since the survey began in 2019. This survey, which gathered data from a record 70 central banks globally, also revealed that nearly 30% plan to add to their gold reserves within the next year. This optimistic view on gold persists despite two consecutive years of record central bank purchases and the gold price reaching new highs in 2024. Reserve managers are turning to gold to mitigate risks and prepare for global political and economic uncertainties. Although 71% still consider gold's legacy a reason to hold it, the primary motivations now include gold's long-term value (88%), performance during crises (82%), and its effectiveness as a portfolio diversifier (76%).

Both emerging market and developing economies (EMDE) and advanced economy central banks have a positive outlook on gold's future share in reserves. Over half (57%) of advanced economy central banks expect gold to constitute a higher proportion of reserves in the next five years, a significant increase from 38% in 2023. Additionally, there is growing pessimism about the US dollar's share of global reserves, with 56% of advanced economy respondents and 64% of EMDE respondents anticipating a decline. Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific, emphasized that extraordinary market pressures, economic uncertainty, and political upheavals have heightened the awareness of gold’s value in managing risks and diversifying portfolios. Despite record demand and rising prices, reserve managers remain enthusiastic about gold as a strategic asset amid ongoing uncertainty.