Despite recent sharp volatility in international gold prices, enthusiasm among global central banks for gold reserves has not waned but rather intensified. According to the latest Global Public Investors report released by the Official Monetary and Financial Institutions Forum (OMFIF), against the macro backdrop of escalating geopolitical risks, heightened sovereign debt concerns, and the evolution of the international monetary system towards multipolarity, gold is solidifying its status as the preferred reserve asset for central banks.
The survey, covering 74 central banks with managed assets exceeding $10 trillion, indicates that the proportion of central banks currently holding physical gold has reached 82%, an increase of 11 percentage points compared to a year ago. Furthermore, a net 30% of respondent institutions plan to continue increasing gold allocation within the next one to two years, making gold the most favored choice among all reserve asset classes. Even amidst record highs and rising acquisition costs, reserve managers maintain robust demand expectations.
Market sentiment shows that over 60% of respondent central banks expect gold prices to climb to the $5,000 to $6,000 per ounce range by mid-2027. Only a minority of respondents indicated that current high prices would deter purchases. The survey highlighted that the significant growth in physical gold holdings is one of the core findings of this report, a trend that continues to strengthen annually. The complex international situation further consolidates gold's safety as a monetary reserve asset; facing geopolitical shocks and global uncertainty, gold is viewed as an irreplaceable safe asset in the short term.
While asset diversification remains the primary motive for central banks holding gold, the weighting of geopolitical factors is increasing rapidly. Over half of reserve managers stated they hold gold to cope with geopolitical risks, a proportion significantly higher than in previous years. Compared to past trade frictions, central banks are currently more concerned about the situation in the Middle East, uncertainty in U.S. foreign policy, and energy security issues. The vast majority of respondents listed the Middle East conflict as the largest risk source, while also noting significant uncertainty in U.S. policy.
Under the consensus that the global monetary system is gradually developing towards multipolarity, although the U.S. dollar will maintain its status as the main reserve currency due to liquidity advantages, an increasing number of central banks expect to gradually reduce the proportion of U.S. dollar asset allocation over the next decade. This trend is no longer limited to emerging market countries but is becoming a global phenomenon. The European Central Bank has limited space due to higher reserves, while regions such as Africa are more inclined to increase the proportion of physical gold holdings.
Looking at future asset allocation, the era of central banks prioritizing government bonds is passing, with a shift towards preferring corporate bonds, followed by gold, and finally equities. This reflects a change in reserve management philosophy; capital preservation remains the primary goal, but with the long-term nature of geopolitical risks, central banks realize the necessity of improving portfolio resilience and obtaining appropriate returns through diversified allocation. This structural change is not a short-term shock but a trend requiring long-term strategic adjustment; central banks are adapting to a future, more complex financial environment by adjusting asset structures.
