Central Banks Double Down on Gold: WGC Survey Shows Record Appetite Amid Geopolitical Turmoil

A growing number of the world’s central banks are signaling their intention to boost gold reserves, according to the World Gold Council’s (WGC) latest annual survey a clear indication that the precious metal’s allure as a safe haven remains undiminished, even as prices experience short-term volatility.

The survey, conducted between February 5 and May 19, revealed that a record 45% of reserve managers expect to increase their institutions’ gold holdings over the next 12 months. This marks a two-percentage-point rise from the previous year and represents the highest level of bullish sentiment since the WGC began tracking this metric. The majority of respondents 54% of the 74 central banks surveyed indicated their holdings would remain stable, while a mere 1% anticipated a reduction, according to data reported by Reuters.

Crucially, most survey responses were collected after the escalation of Middle East tensions in late February a period that initially triggered a rally in oil prices and a corresponding dip in gold prices. Yet rather than dampening enthusiasm, the price correction appears to have reinforced central banks’ strategic commitment to the asset. “The recent price fall has not changed their minds,” said Shaokai Fan, head of the central banks sector at the WGC, emphasizing that long-term portfolio considerations continue to outweigh short-term market movements.

That conviction was tested and validated over the weekend, when the U.S. and Iran reportedly agreed on terms to end their conflict and reopen the Strait of Hormuz. The geopolitical breakthrough sent shockwaves through commodity markets, prompting a sharp 3% rebound in gold prices on Monday, as investors reassessed supply-chain risks and inflationary pressures.

Looking ahead, independent consultancy Metals Focus projects that central bank gold demand will moderate in 2026, forecasting a 15% year-on-year decline in tonnage. However, the firm notes that aggregate demand is still expected to remain comfortably above pre-2022 levels, ensuring that official-sector buying continues to act as a consistent, structural tailwind for the gold market.

A Broadening Base of Gold Owners

The survey also highlights a significant expansion in the pool of gold-holding institutions. A striking 93% of respondents reported that their reserves already include gold, a sharp increase from 81% a year ago. This suggests that not only are existing holders adding to their positions, but new central banks are also joining the fold often driven by a desire to reduce dependency on major reserve currencies.

When asked to rank the primary motivations for owning gold, a record 90% of respondents cited its performance during times of crisis the highest share ever recorded in the survey’s history. Other top-ranked drivers included its role as a long-term store of value and its effectiveness in portfolio diversification. Notably, gold’s function as a hedge against geopolitical risk was particularly favored among emerging market and developing economy (EMDE) respondents, with 85% endorsing this rationale a reflection of their heightened exposure to currency volatility, sanctions, and regional instability.

Repatriation and Storage: A Quiet Shift

The survey also shed light on evolving attitudes toward physical gold custody. As some central banks continue to repatriate gold held abroad, 9% of respondents said they had increased domestic storage over the past 12 months up from 5% last year. Concurrently, 10% reported diversifying their overseas storage locations (up from just 2%), a move aimed at mitigating concentration risk in an increasingly fragmented global landscape.

Looking forward, within the next 12 months, 7% of central banks plan to further increase domestic storage, while 9% intend to diversify their overseas vaulting arrangements. The WGC did not ask respondents to disclose the source countries of repatriated gold, but its ongoing research confirms that the Bank of England remains the most popular international vaulting destination, followed by domestic storage facilities and the Bank for International Settlements (BIS).

Analysis & Implications

This year’s survey results paint a portrait of a global financial system in transition. Central banks are not merely accumulating gold they are rethinking where and how they store it, signaling a deeper concern over counterparty risks, geopolitical fragmentation, and the long-term credibility of fiat currencies. The record-high crisis-performance metric suggests that gold is increasingly viewed not as a relic, but as a first line of defense against a multipolar world of uncertainty.

While the pace of accumulation may slow from its recent breakneck speed, the direction of travel remains unambiguous: for the world’s monetary guardians, gold is no longer an option it is a necessity.

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