GOLD has overtaken the euro to claim second place amongst global reserve assets held by central banks, propelled by unprecedented buying and rising valuations, new European Central Bank data shows.
Gold represented one-fifth of worldwide official reserves in 2024, exceeding the euro’s 16% share whilst remaining behind the dominant US dollar at 46%, according to the Financial Times which quoted Wednesday’s ECB analysis.
Monetary authorities maintained their aggressive gold-buying streak, purchasing over 1,000 tons annually for three straight years through 2024. This volume equals 20% of global yearly output and doubles the typical acquisition rate from the previous decade.
Current central bank holdings near 36,000 tons approach the record levels from the 1960s Bretton Woods system, when currencies were pegged to gold-backed dollars, said the newspaper.
Key purchasers included India, China, Turkey and Poland, the World Gold Council reported. Prices jumping 30% last year contributed significantly to gold’s enhanced reserve position, with 2025 seeing an additional 27% surge to historic peaks of $3,500 per ounce.
This accumulation stems from monetary authorities seeking alternatives to dollar dependence amid geopolitical tensions and sanctions risks, said the Financial Times. Ukraine’s 2022 invasion intensified this “de-dollarisation” drive, particularly amongst developing nations, as gold offers sanctuary from asset freezes without counterparty exposure.
ECB research found that five of the decade’s ten largest gold reserve increases occurred when nations faced sanctions. Countries aligned with China and Russia proved most aggressive buyers over recent years.
Surveys of 57 gold-holding central banks highlighted sanctions fears, anticipated monetary system changes, and dollar-independence goals as primary motivations. The traditional inverse relationship between gold and bond yields collapsed in 2022 as political rather than inflation hedging drove demand.
