Central Banks Gold Rush: Rising Reserves and Declining US Dollar Holdings
Central banks around the world are increasing their gold reserves at a record pace, with 95% of surveyed central bank respondents expecting global gold reserves to rise over the next 12 months. A record 43% of these banks plan to increase their own holdings during that time. This trend is driven by concerns over the US dollar's dominance amid geopolitical tensions and a trade war, as well as weariness over America's fiscal trajectory.
Gold prices have hit all-time highs this year, fueled by central bank purchases, inflows into exchange-traded funds, and expectations that the Federal Reserve will cut interest rates. Central bank gold buying has been steadily accelerating, adding more than 1,000 tonnes to their reserves annually over the past three years – more than double the 400–500 tonne average seen in the previous decade.
While many Wall Street analysts remain bullish on gold heading into the end of the year, Citi expects gold demand to abate as a Trump "put" kicks in ahead of the 2026 elections. The analysts believe that President Trump cares about US popularity, GDP, and geopolitical success, and thus the Trump put exists. They expect gold returns to about $2,500 to $2,700 an ounce by the second half of 2026.
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Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre for in-depth analysis of the latest stock market news and events moving stock prices. For the latest financial and business news from Yahoo Finance, click here.
