Why are the Central Banks increasing their gold purchases this year?

Gold has always been a key asset in the financial world. It seems everyone wants a piece of the pie, and central banks are no exception. Global central banks are rapidly increasing their gold reserves, to the point that they now hold more gold than US Treasury bonds for the first time since 1996.

To date, official global gold reserves have surpassed 37,000 tons, exceeding the euro and making gold the second-largest reserve asset after the US dollar.

In the Central Bank Gold Reserves Survey 2025, 94% of respondents expect gold reserves held by central banks worldwide to continue increasing over the next 12 months. None of the 72 participating central banks anticipate a decline in their own gold reserves.

This strong long-term conviction suggests that the gold-buying trend in 2025 is not just a temporary spike, but a deliberate strategy in how central banks approach managing their reserves. Analyzing the situation, some of the main reasons can be summarized as follows:

✅ Reducing dependence on the US dollar.

✅ Protecting against inflation.

✅ Geopolitical and economic uncertainty.

Without any further ado, let's see why central banks increased their gold purchases in 2025 and how this can affect your trading operations.

The Strategic Explanation Behind Gold Buying in 2025

The renewed interest of central banks in gold goes beyond the traditional perception of gold as a safe haven asset. Rather, it reflects a larger structural shift and a global rebalancing movement in modern financial history.

💲Reducing Dependence on the US Dollar

Many emerging economies, such as China, Russia, and other BRICS countries, have actively purchased gold in recent years as part of a broader dedollarisation effort. Holding gold allows these countries to reduce their dependence on Western powers and strengthen their economic self-reliance.

China, in particular, was one of the most aggressive gold buyers in 2025, adding approximately 39.3 tons to its reserves between January and September 2025 alone. Today, the world's second-largest economy is estimated to hold over 2,199 tons of gold in total.

Source: EBC News

Experts believe this recent accumulation is primarily aimed at supporting the yuan and reducing dependence on the US dollar. Gold is considered a neutral asset with a stable value. It therefore represents a perfect alternative for diversifying investments focused on the United States and further supporting non-dollar-denominated transactions within the BRICS+ bloc.

🔐 Protecting Value Against Rising Inflation

Another reason central banks are increasing their gold purchases in 2025 is to protect themselves against inflation. This issue has become particularly crucial following the monetary expansion that followed the COVID-19 pandemic.

Gold remains one of the most reliable assets for protecting an economy during periods of monetary weakness and high market uncertainty. This is why central banks continue to protect their economies by buying gold in 2025.



🌎 Managing Risks Related to Global Political and Economic Instability

Rising geopolitical tensions also play a crucial role in this area, particularly since 2022, after the G7 froze Russia's US dollar and euro reserves following its invasion of Ukraine.

This has encouraged central banks across all continents to hold assets less vulnerable to international sanctions or political interference. Unlike foreign currency reserves, gold cannot be frozen by SWIFT restrictions or asset seizures.

Physical gold reserves provide bargaining power during international conflicts and economic crises. Countries with significant gold reserves tend to have more leverage in negotiations and trade agreements, simply because gold represents security and wealth protected from sanctions. This strategic value becomes even more important in a world where alliances can shift rapidly and financial systems are increasingly being used as weapons.