Central banks expect to swap out more of their U.S. dollar reserves for gold as greenback’s safe-haven status weakens
From Yahoo Finance: 2025-06-17 08:18:00
Central banks in the Global South are increasing their gold reserves to reduce exposure to the U.S. dollar amid trade tensions, with roughly half planning to expand gold holdings in the next year. Geopolitical instability and potential trade conflicts are key factors driving the shift, leading to gold prices reaching record highs.
Survey results from the World Gold Council show that 95% of central banks expect overall gold reserves to increase in the next 12 months, with central banks in emerging economies leading the charge. Despite the lack of yield, gold prices have surged while the U.S. dollar index remains near three-year lows due to tariff uncertainties.
Central banks globally are looking to reduce dependence on the U.S. dollar by increasing gold reserves, with 72% of respondents predicting a moderate increase in gold holdings over the next five years. The trend towards de-dollarization is gaining momentum, with a significant drop in U.S. dollar holdings expected.
Central banks purchased over 1,000 metric tons of gold in 2024, marking a significant increase from previous years. This trend is expected to continue as central banks seek alternatives to the U.S. dollar. Gold reserves are seen as a safe-haven asset amidst market uncertainties and trade tensions.