Central banks around the world expect their gold holdings as a proportion of their reserves to increase over the next five years while expecting their dollar reserves to be lower, a survey by the World Gold Council (WGC) showed.

Gold demand from central banks has risen significantly over the past three years despite its price rally to consecutive records. It hit an all-time high of $3,500.05 an ounce in April, up 95% since February 2022 when Russia invaded Ukraine.

Seventy three central banks responded to WGC’s survey, carried out between February 25 and May 20, and 76% of these expect their gold holdings to be higher in five years compared with 69% last year.

Nearly three-quarters of respondents expected central banks’ dollar-denominated reserves to be lower in five years compared with 62% last year. Central banks have accumulated more than 1,000 metric tons of gold in each of the last three years, WGC said, adding that this represented a significant rise from the 400-500 ton average in the preceding decade.

A record 95% of respondents think central bank gold reserves will increase over the next 12 months, up from 81% last year, according to WGC’s survey, which also showed the Bank of England remains the most popular location for their gold reserves.

Source: Globalbankingandfinance