Central Banks Accelerate Gold Purchases as Dollar Credibility Erodes
Gold prices have surged to unprecedented levels, crossing $4,600 per ounce for the first time. Central banks around the world are increasingly shifting reserves from the U.S. dollar into gold, signaling a structural transformation in the international monetary system.
According to the World Gold Council, total gold held by central banks now approaches $4 trillion—surpassing global holdings of U.S. Treasuries for the first time in nearly three decades. The metal continues its strong momentum, gaining over 6% in early 2026 following a 67% rally in 2025.
A Global Rush to Bullion
Central banks remain among the strongest buyers of gold. Net purchases reached 45 tonnes in November 2025, bringing the year-to-date total to 297 tonnes. Poland led the charge, adding 95 tonnes last year, while Brazil increased its reserves by 43 tonnes. China’s central bank extended its purchasing streak to 14 consecutive months.
A recent World Gold Council survey shows that 95% of central banks plan to continue increasing their gold reserves. Projections from J.P. Morgan estimate that purchases could reach 755 tonnes in 2026—far above the long-term average of 400–500 tonnes recorded before 2022.
Dollar’s Declining Reserve Status
IMF data indicates the U.S. dollar’s share of global reserves fell to 56.9% in Q3 2025—its lowest level since 1994. In contrast, gold’s share of total central bank reserves has climbed above 25%, up from just 12% a decade ago.
Concerns about U.S. monetary policy independence have added fuel to the shift. Political controversy surrounding the Federal Reserve and alleged government interference under President Trump has amplified unease about holding dollar assets. Federal Reserve Chair Jerome Powell publicly warned that political coercion could undermine the Fed’s independence in setting interest rates.
Outlook: $5,000 Gold in Sight
Major brokerages are forecasting further gains. HSBC expects gold to break past $5,000 per ounce in early 2026, while Goldman Sachs raised its 2026 target to $4,900. Analysts at Morgan Stanley anticipate $4,800 by year-end.
“The factors driving gold prices show no sign of fading,” said Brian Fung, CEO of the Hong Kong Gold Exchange. “As central banks diversify away from the dollar, the era of unquestioned dollar dominance may be ending.”
