Christiaan Hetzner
4 min read
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Central banks from the Global South are actively shifting their own reserves toward gold at a much faster rate than advanced economies to reduce their exposure to the U.S. dollar amid growing trade protectionism, according to a survey by the World Gold Council. “The recent market developments around tariffs have raised questions on the safe-haven status of USD/UST, but have bolstered that of gold,” one response read.
Roughly every second central bank in the Global South plans to expand its own gold reserves over the coming 12 months, new data shows, and the currency most likely to pay the price for the shift is the U.S. dollar.
Results from the Central Bank Gold Reserves Survey 2025 published on Tuesday by the World Gold Council (WGC) found geopolitical instability and potential trade conflicts as chief reasons why emerging economies are shifting toward gold at a much faster rate than advanced economies.
Asked more broadly about their expectations regarding 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 owing to increased tariffs and trade protectionism, but any decline would likely be gradual as a result of the U.S.’s deep financial markets, comparatively strong legal institutions, and the lack of any obvious substitute.
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- to 500-ton average over the preceding decade.
