World Gold Council Survey: 45% of Central Banks Plan to Increase Gold Reserves in the Next 12 Months

The World Gold Council (WGC) said on Tuesday that 45% of central banks surveyed expect to increase their gold holdings over the next 12 months, up two percentage points from a year ago. In the WGC’s annual survey conducted between February 5 and May 19, 54% of the 74 central banks surveyed indicated their gold holdings would remain unchanged, while 1% expected a decline. Most responses were received after the outbreak of conflict in the Middle East in late February, which triggered a rise in oil prices and a decline in gold prices. The WGC’s Global Head of Central Banks stated that central banks remain enthusiastic about gold, and recent price declines have not altered their views. Additionally, the WGC noted that 93% of respondents currently hold gold, up from 81% a year ago. Among the many reasons for holding gold, as many as 90% of respondents cited gold’s strong performance during times of crisis. Other key reasons included its role as a long-term store of value and portfolio diversification. Respondents from emerging markets and developing economies (85%) placed particular emphasis on gold as a hedge against geopolitical risk. As some central banks continue to relocate their gold reserves, 9% of respondents reported increasing their domestic gold holdings over the past 12 months, up from 5% last year; 10% said they had diversified the geographic locations of their overseas gold reserves, up from 2% last year. Over the next 12 months, 7% of central banks plan to increase domestic storage, and 9% plan to diversify their overseas