Central Banks Rethink Gold Reserves Amid Geopolitical Unrest

For decades, central banks kept their gold reserves almost as an afterthought. The amount they owned was more important than where it was stored. However, this is changing.

In September, the Netherlands moved 86 tonnes of gold from New York and Ottawa to London, citing 'increasing geopolitical unrest' and the need for its reserves to be more readily deployable in a crisis.

This move is significant not because 86 tonnes is a large amount of gold, but because it shows how central banks are thinking about their reserves differently. The Dutch central bank reduced its holdings in New York and Ottawa while increasing its London holdings, arguing that gold stored at the Bank of England is more readily tradable and useful in an emergency.

This isn't an isolated case. Around the world, central banks are buying more gold, bringing some home, and reconsidering where they store the rest. Central banks accumulated about 1,000 tonnes a year on average over the past four years, roughly twice the average of the preceding decade.