Central banks are showing interest in gold with a survey from the Official Monetary and Financial Institutions Forum indicating that one-third of 75 central banks plan to acquire gold in the next 1-2 years. This trend is expected to continue, with 40% of central banks intending to purchase gold over the next decade.
The US dollar’s popularity among central banks has decreased, dropping from first to seventh place in just one year. Seventy percent of central banks cite the political climate in the US as a deterrent to investing in US dollars. Meanwhile, the euro and Chinese renminbi are gaining traction.
Projections for Us Dollar and Euro
Despite the decline, projections suggest the US dollar will remain the leading reserve currency over the next ten years with a 52% expected share. The euro is predicted to follow at 22%. An ECB study showed the euro had fallen to third place behind gold as a reserve currency last year.
A World Gold Council survey further indicates central banks are planning more gold purchases in the coming year. This trend is expected to continue supporting gold prices, underpinning demand from these institutions.
What we see here is a firm shift in how central banks are managing their reserves, and more noticeably, how they are re-evaluating the role of traditional safe havens. The data from the Official Monetary and Financial Institutions Forum isn’t just anecdotal—it clearly shows that a growing number of central banks are preparing to add more gold to their balance sheets, not just as a short-term hedge, but as a strategic holding that will grow in relevance across the next decade.
Gold purchasing intentions are not limited to short-term planning. With 40% of these institutions signalling their intent to expand holdings over the next ten years, there is a longer view being taken—suggesting that this pivot is not purely a reaction to recent market conditions or geopolitical stress, but rather a broader rebalancing of reserve strategies. These buy-side pressures, should they materialise at the expected pace, are likely to lend structural support to bullion markets, with implications for cost of carry assumptions and forward curve calibration.
Shift from Us Dollar to Other Currencies
The clear loss of favour towards the US dollar among reserve managers introduces a measurable shift in how foreign exchange exposure is being managed globally. It is striking that the dollar, once a near-universal first option for safe reserves, now ranks seventh when central banks are asked about their future preferences. The political situation in the US seems to be weighing heavily on sentiment, with 70% expressing concern—an unusually high level of consensus amongst typically risk-averse institutions. This in itself adds a layer of policy risk that derivative pricing models may start to reflect through increased implied volatility or shifting correlation structures.
Meanwhile, rising interest in the euro and particularly in the renminbi denotes not only diversification but perhaps also a recalibration of perceived stability. Yet expectations are anchoring around the dollar still maintaining the top spot in global reserves, albeit diminished. With a projected 52% share, risk-pricing still needs to account for dollar dominance, but with more nuance than in years past. It would not be prudent, however, to treat that lead as immovable. The ECB’s own findings, showing the euro being overtaken by gold as a reserve asset, raise pressing questions about the trajectory of currency-based reserves more broadly.
For gold, the takeaway is clear. With additional buying planned—some of it no doubt from institutions seeking to shield themselves from fiat-driven volatility—we see the potential for sustained support in both spot and futures markets. The World Gold Council’s validation of this trend suggests physical demand won’t merely be intermittent or opportunistic. Instead, this forms part of a more entrenched position-building effort. Depending on how spot prices react in the shorter term, derivative traders may notice corresponding shifts in volatility patterns and term structure, especially during periods of geopolitical stress or macro-driven dollar weakness.
From a trading perspective, adjusting exposure based on longer-term demand signals may now be more than just prudent—it may be necessary. Seasonal considerations and expected policymaking timelines could play a larger part in price action than they have in typical risk-on/risk-off cycles. Spotting the footprints of these central actors in futures or forward positioning could offer non-obvious entry points or hedging opportunities as their influence grows more visible.
