Central Banks Favor Gold, Expect Dollar Share Drop

Central banks are increasingly turning to gold as a reserve asset, according to a recent survey. In five years, 84% of respondents expect gold to account for a larger share of overall reserves, up from 76% in the prior year.

The survey, which covered both advanced economies and emerging-market developing economies (EMDE), found that most central banks project a modest rise in gold's share over the next five years. The US dollar, currently the top reserve currency, is expected to see its grip ease further: 74% of respondents anticipate its share will be smaller in five years.

Looking ahead to the next year, a strong consensus exists that global official gold reserves will increase. A record 89% of central banks expect this to happen, with only 11% thinking gold's share of total reserves will remain the same or decline.