Diversification away from USD reserve holdings, while still moderate, has been accelerating in recent years, according to Currency Composition of Official Foreign Exchange Reserves (COFER) data from the International Monetary Foundation (IMF).
Globally, central bank gold holdings amount to nearly 36,200 tonnes and account for almost 20% of official reserves, up from around 15% at the end of 2023, according to reported IMF data through the end of 2024.
If central banks with a reported share of gold under 10% were to increase their gold holdings to 10% at a price of $4,000/oz, this would require a notional shift into gold of around $335 billion, or the equivalent of around 2,600 tonnes of purchasing.
Even at $5,000/oz, the same exercise results in a $194 billion notional shift into gold, or the equivalent of 1,200 tonnes of purchasing.
“With this in mind, we continue to monitor the largest reserve holders with a reported gold share below 10%. Brazil reported purchases of 15 tonnes in September and another 16 tonnes in October, while the Bank of Korea also publicly discussed ‘plans to consider additional gold purchased from a medium- to long-term perspective,’” Shearer said.
At the same time, some of the largest buyers in recent years have been central banks whose gold holdings already exceed 10%. According to a 2020 BIS study, central banks in emerging markets (EM) or those using commodity currencies benefit from holding more than 20% of their reserves in gold, as it provides strong protection against foreign exchange risk.
Investors
Central banks haven’t been the only ones increasing their relative share of gold holdings over the last couple of years, with investor demand set to expand too.
In the financial gold markets, investors’ futures positioning remains long, or with an expectation the price will rise in value in the future.
While it is the quickest component from a flows perspective, futures positioning is only one relatively small part of broader gold investor holdings, which also include gold ETFs and physical bar and coin holdings.
J.P. Morgan Global Research forecasts ongoing robust investor demand for gold, with around 250 tonnes of inflows into ETFs expected in 2026, while bar and coin demand is once again set to surpass an elevated 1,200 tonnes of annual demand.
