Results from the Central Bank Gold Reserves Survey 2025 published on Tuesday by the World Gold Council found geopolitical instability and potential trade conflicts as chief reasons why emerging economies are shifting towards gold at a much faster rate than advanced economies. 

Asked more broadly about their expectations how their international peers will behave in the coming 12 months, there was near unanimity regardless of the country of origin. Of the 15 central banks from advanced economies and 58 central banks from emerging markets and dynamic economies, or EMDE, polled, 95% expected overall gold reserves to increase in the next 12 months.

This helps explain why the precious metal—despite its lack of a yield versus other assets as well its physical storage costs—touched $3,446 an ounce, close to its April record, while the U.S. dollar index is near three year lows.

“The uncertainty stemming from the tariffs implemented and committed by the USA regarding trade policies in the recent period may reduce the interest in USD and USD-denominated assets as a reserve currency,” one anonymous central bank is quoted as saying in the report.

Of all institutions polled, 48% of those in the Global South expected their own gold reserves to grow in the immediate future versus just 21% in advanced economies. Respondents argued the de-dollarization trend that favors a shift to gold would continue due to increased tariffs and trade protectionism, but any decline would likely be gradual due to the U.S.’s deep financial markets, comparatively strong legal institutions and the lack of any obvious substitute.

Tariffs raise concerns over safe-haven status of U.S. dollar and Treasury bonds

In 2024, central banks bought 1,045 metric tons of gold, accounting for about a fifth of global demand. This marked the third straight year during which they accumulated over 1,000 tons, according to figures from the WGC, up sharply from the 400-500 ton average over the preceding decade. 

According to the survey, 72% of all respondents believe gold reserves held by the world’s central banks will increase moderately over the next five years versus 66% the previous year. Another 4% of respondents, entirely coming from non-advanced economies, predict the gain will be even be significant, up 1 percentage point from before. 

“Central banks are expected to continue purchasing gold as they look for ways to reduce dependence on USD,” one central bank replied in the survey. “The recent market developments around tariffs have raised questions on the safe-haven status of USD/UST, but have bolstered that of gold.”

By comparison, 45% expect a moderate drop in U.S. dollar holdings over the same time period. While this represents an improvement over the 49% a year earlier, the number replying dollars would see a significant decline soared—to 28% from 13% previously.

Dollar’s 43% share of global central bank reserve assets expected to drop

The sharpest divergencies in responses between advanced economies and the Global South related to the trend of de-dollarization and how great a role geopolitical tensions play in fueling it. 

When asked how much of total global reserves would still be denominated in dollars five years from now, more central banks from non advanced economies anticipated a slight decrease from the current 43% share than their peers in advanced economies.

For comparison, gold accounted for only 19% of total reserves, with 15% allocated in euros and 2% in Chinese renminbi.

Among those that expected no change in the share of dollar-denominated reserves, the relationship was flipped: far more advanced economies believed this to be the case than those elsewhere.

“This resonates with the recent trend in reported central bank holdings, where we see a stronger appetite for gold accumulation from [emerging markets and dynamic economies] central banks,” the World Gold Council concluded.