Central banks expect official sector demand to rise in the next year despite high gold prices.

LONDON, 18 June, 2024 - More than eight in ten (81%) of respondents to a central bank survey have indicated that they expect reserve managers will continue to increase their gold holdings in the next 12 months, according to new data released by the World Gold Council today1. This is the highest ever recorded since our 2019 annual survey. 

The 2024 Central Banks Gold Reserves (CBGR) survey, which collected data from a record 70 of the world’s central banks, also finds that nearly 30% of central banks plan to add to their own gold reserves within the next year. This favourable view of gold from reserve managers persists despite two successive years of record central bank purchasing2 and the gold price hitting new all-time highs in 2024.

According to the report, reserve managers indicate that they are looking to gold to help mitigate risks and prepare for further political and economic uncertainty, globally. Although seven in ten (71%) still view gold’s legacy as a reason to hold it, other reasons have surpassed it this year. The top three reasons to hold gold now include gold’s long-term value (88%), performance during a crisis (82%), and its role as an effective portfolio diversifier (76%).

Central banks in emerging market and developing economies (EMDE) maintained their positive outlook for gold’s future share in reserves portfolios. Notably, they were joined by advanced economy central banks which now view gold more positively. More than half (57%) of this group said gold would account for a higher proportion of reserves five years from now, a significant increase compared to 2023 (when 38% of respondents indicated the same view)3. Advanced economy central banks have also become more pessimistic in their outlook for the US dollar’s share of global reserves, a view which has consistently been more prominent among EMDEs. More than half (56%) of advanced economy respondents believe the US dollar’s share of global reserves will fall (up 10 percentage points year-on-year), while 64% of EMDE respondents share the same view.

Shaokai Fan, Global Head of Central Banks & Head of Asia-Pacific, commented:
“Extraordinary market pressure, unprecedented economic uncertainty and political upheavals around the world have kept gold front of mind for central banks. Many of these institutions have become more aware of the asset’s value as a way to manage risks and diversify their portfolios. What has been remarkable is that despite record demand from the official sector in the last two years, coupled with climbing gold prices,  many reserve managers still maintain their enthusiasm for gold. While influences like price may temporarily slow down purchases in the near term, the broader trend remains in place, as managers recognise gold’s role as a strategic asset in the face of ongoing uncertainty.”