Surveys Show Central Banks Plan to Cut Dollar Exposure and Keep Buying Gold

What happened

Two new surveys indicate a shift in central bank reserve strategies. OMFIF found that for the first time, more reserve managers plan to reduce their dollar exposure over the next decade than increase it. A World Gold Council survey found 74% expect the dollar's share of reserves to fall in five years, 89% expect central bank gold holdings to rise in the next year, and a record 45% plan to increase their own gold holdings. Central banks have bought about 1,000 tonnes of gold per year on average over the past four years, roughly double the previous decade's pace.

Why it matters

The dollar still dominates global finance, but central banks are diversifying away from it, citing geopolitical tensions, government debt, and changing trade relationships. Gold is becoming a larger part of reserves. While not a breakup with the dollar, this trend reflects a broader hedging of bets and could gradually reshape the international monetary system.