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Informist, Wednesday, Jun. 25, 2025

 

NEW DELHI – Central banks are increasingly turning to gold as a safe-haven asset, with 32% planning to boost their holdings within the next 12 to 24 months – the highest level of conviction in five years – according to a recent survey by the Official Monetary and Financial Institutions Forum. The results, released on Tuesday, underscore a growing trend towards diversification and protection against geopolitical risks, which is expected to persist.

 

According to the survey, 40% of central banks intend to purchase gold over the next decade, making it the most sought-after asset class. The surge in gold prices, which have risen nearly 80% since February 2022, has led the precious metal to become the second-largest component of international reserves, surpassing even the euro, according to the report.

 

The survey also found that most central banks and public funds expect gold prices to remain above $3,000 an ounce over the next year, with over 20% anticipating a record high above $3,500 per ounce. The growing demand for gold is indicative of a broader flight to safety, with 21% of global public funds planning to increase their allocation to gold in the next one-two years.

 

The trend is also marked by a shift away from the US dollar, the survey showed, with 16% of participants reducing their exposure to the greenback. "The dollar is the only currency that central banks are looking to decrease their exposure to. Despite this, gold remains the top portfolio diversifier, although the survey showed growing demand for the euro and Chinese yuan," the survey report said.

 

The findings suggest that central banks are increasingly looking to diversify their reserves and protect against geopolitical uncertainty, with gold emerging as a preferred asset class. As the global economic landscape continues to evolve, demand for gold is likely to remain strong, driven by its safe-haven status and diversification benefits, the report said.  End

 

Reported by Pallavi Singhal

Edited by Avishek Dutta

 

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