How important are central bank holdings of gold?

The rising price of gold—up by two-thirds over the past year, and recently peaking above $5,000 an ounce—is making headlines and drawing attention to the role of central banks as purchasers of gold at a time of geopolitical uncertainty and political turmoil in Washington.  This post focuses on the role of gold in central banks’ foreign reserves, drawing on data in my External Wealth of Nations database for 1970-2024.

How important are central bank gold holdings?

While gold played an important role in the international monetary system during the Bretton Woods period from 1945 to 1970, its role was greatly diminished once the fixed exchange rate system centered on the U.S. dollar collapsed in 1971. Global holdings of gold by central banks fell in volume terms between 1971 and 2000 by about 10%, while reserves held in foreign currency rose five-fold in constant dollars. Chart 1 shows that the value of central bank gold holdings as a share of global GDP has risen during the past quarter century, reaching 2.5% at the end of 2024.

Gold accounts for about 17% of all global foreign reserves. According to IMF data, the total held by central banks as well as the IMF was about 40,000 tons, about 20% of the global stock of gold reported by the World Gold Council.

Which central banks hold gold?

Chart 1 also shows that central banks in advanced economies hold the lion’s share of gold in foreign reserves. But Chart 2 shows how virtually all recent gold purchases have come from emerging market and developing economies.

These purchases have been driven by a variety of factors, including geopolitical concerns (Arslanalp, Eichengreen, and Simpson-Bell, 2023). Advanced economy central banks were net sellers of gold until the Global Financial Crisis and have been holding a broadly stable volume of gold since then.

Euro area countries and the U.S. are the largest holders of gold in their central banks ($903 billion and $682 billion, respectively, as of end-2024—see the first column in the table), while Russia and China are the largest holders of gold reserves among emerging markets and developing economies.

But with the exception of Japan, large advanced economies hold relatively small foreign-exchange reserves, and hence gold represents a large share of their reserves, as the second column in the table illustrates. Emerging market economies hold larger foreign exchange reserves in relation to their GDP. However, gold represents a sizable share of reserves in countries such as Turkey and Russia.

Who is buying and who is not?

Central banks in euro area countries and the U.S. have been net sellers of gold since 1970, but together they still accounted for about 57% of global gold reserves as of end-2024. The very large increase in the price of gold (it tripled, in nominal terms, between 2007 and 2024) accounts for the rising value of their gold reserves.

Among emerging markets, however, there were substantial net gold purchases by central banks following the Global Financial Crisis (GFC), particularly Russia, China, Turkey, and India. Chart 3 provides a country breakdown of the largest net purchases of gold by volume between 2007-15 (the GFC and several years following it) and between 2015-24. (For reference, the market price for gold was about $2560 per ounce at the end of 2024 versus $830 at the end of 2007.)

What has happened since the end of 2024?

Preliminary IMF data for 2025 suggests some further increase in the volume of gold held by central banks, almost entirely due to emerging markets and developing economies. The most notable purchases were undertaken by Poland. Preliminary calculations suggest that gold holdings could account for about a quarter of global reserves at the end of 2025, primarily as a result of gold’s dramatic price increases. The World Gold Council estimates that central banks bought 863 tons of gold in 2025, down 20% from the previous year’s 1,092 tons. The Gold Council’s estimates of central bank gold purchases are larger than the IMF’s. The difference may result from purchases unreported to the IMF as well as from the inclusion in the Gold Council’s statistics of purchases by other official institutions such as sovereign wealth funds (Arslanalp, Eichengreen, and Simpson-Bell, 2025).

What drives demand for gold holdings by central banks?

There are valuable broader analyses of the factors driving gold demand by central banks in recent years, including a 2025 summary of relevant data by the European Central Bank and the aforementioned recent paper by Arslanalp et al., which also discusses shifts in the location of gold reserves, including a trend towards repatriation from its custodial locations at the New York Fed and the Bank of England. Surveys of central banks conducted by the World Gold Council and the Official Monetary and Financial Institutions Forum (OMFIF) suggest that gold plays a role as a store of value, a hedge against inflation and geopolitical risk, and because its value rises in crisis times. Arslanalp, Eichengreen, and Simpson-Bell (2023) also document how the imposition of financial sanctions by the United States and its allies is associated with an increase in the share of central bank reserves held in gold, with Douglass, Goldberg, and Hannaoui (2024) reporting similar findings for countries less geopolitically aligned with the U.S.