Central banks hold most gold in 50 years as sanctions fears reshape reserves

KUALA LUMPUR, 21 JULY 2026 —

Central banks now hold 36,000 tonnes of gold — the highest level since 1975 — as geopolitical risk and sanctions fears push emerging markets to diversify reserves away from the US dollar.

Nine out of ten central banks surveyed by the council cited gold’s performance during crises as a key reason for stockpiling. Another 37% of emerging-market banks specifically flagged “concerns about sanctions” or “anticipation of changes in the international monetary system” as drivers.

The shift has been uneven. Since 2009, emerging markets and developing economies have driven the buying, led by Russia, China, Turkey, India and Kazakhstan. Russia accelerated purchases after Western sanctions froze roughly US$300 billion of its foreign reserves in 2022 and cut it off from the SWIFT payments network.

Central banks hold assets such as foreign-currency deposits, government debt and gold as reserves. They use these to intervene in markets, support their currencies or absorb shocks when borrowing becomes difficult or expensive. Gold’s role in reserves is rising but remains modest: the European Central Bank calculates monetary authorities now hold 27% of reserves in gold compared with 22% in US Treasuries. It is the first time bullion has overtaken America’s debt in official portfolios.

That reallocation reflects both geopolitical caution and the surge in gold’s price. The metal is still only a small slice of total reserves for most emerging economies, however.

The current accumulation echoes levels last seen at the end of the Bretton Woods system in 1971, when the dollar’s value was tied to gold. In the 1990s, many rich-world central banks reversed course. Australia sold 247 tonnes in 1997 when the price dipped below US$400 an ounce; the proceeds would be worth about US$29 billion today.

The United Kingdom fared worse: between 1999 and 2002, then-Chancellor Gordon Brown sold 395 tonnes at an average US$275 an ounce during a 20-year price low.

Central banks use reserves to intervene in currency markets, back liabilities or cushion shocks. Gold’s appeal has grown as sanctions have become a favoured foreign-policy tool of Washington and Brussels. After Russia’s annexation of Crimea in 2014, Moscow stepped up gold buying and has since purchased more than any other nation.

The World Gold Council reports that 45% of central banks now expect to increase holdings over the next year, up from a decade-long average of about 20%. The council’s annual survey shows 90% of respondents view gold as a reliable store of value during inflation and currency stress.

The trend is unlikely to restore gold’s pre-eminence when major currencies were on a gold standard. In an era of heightened sanctions risk and dollar dependency, bullion offers a hedge that few other assets can match.