Central banks want to sell USD to buy gold

For the first time since 2023, the number of central banks in the world planning to reduce the proportion of USD holdings is greater than the group intending to increase the proportion in the next 10 years, according to a new report released by the Forum of Official Monetary and Financial Institutions (OMFIF) – an independent research organization headquartered in London (UK).

The 2026 survey was conducted by OMFIF in the period from March to May, with the participation of 74 central banks. “This year, global geopolitical factors have surpassed the US’s internal political environment in reducing the attractiveness of the USD,” OMFIF’s report said.

Conversely, rising geopolitical risks and growing doubts about the stability of the international monetary system are driving demand for gold. The proportion of central banks planning to increase investment in this precious metal is at a record high, even though prices have increased more than 20% over the same period last year.

According to the report, gold has become central to the national reserve management strategies of many central banks (82%). 51% of survey participants view gold as a tool to protect against risks, an increase of 11 percentage points compared to 2024.

In the short term, gold is the asset class where central banks plan to increase their holdings the most, with 30% of respondents planning to increase their allocation over the next one to two years.

Previously, in mid-June, the results of the annual survey of the World Gold Council (WGC), with the participation of more than 70 central banks, showed that 90% predicted that their total gold reserves would increase next year.

The WGC said central banks have bought an average of 1,000 tonnes of gold per year over the past four years – double the average of the previous decade. Meanwhile, the proportion of USD holdings in their foreign exchange reserves fell to its lowest level in two decades last year, according to JPMorgan.

However, OMFIF’s report emphasizes that the USD still holds a dominant role in the reserve portfolio and is likely to maintain its position in the near future. According to Andrea Correa, Head of Research at OMFIF, the proportion of USD in central bank reserves has remained around 58% over the past 5 years.

Still, the de-dollarization process is still taking place gradually, with central banks transferring some of their reserves to euros and yuan. 29% intend to increase their euro holdings in the long term, compared with 22% a year ago.

According to Karsten Stroborn, General Director in charge of markets of the Bundesbank (German Central Bank), the amount of international bonds issued in the euro has reached a record high in 2025. The Euro has also become the most used currency in the green bond market.

Along with that, nearly all central banks surveyed by OMFIF said that the yuan helps diversify their portfolios effectively. Demand for Singapore dollars, Korean won and South African rand is also growing.