Gold surpasses Euro as second largest reserve asset
Central banks globally have significantly increased their gold reserves, leading gold to surpass the euro as the world's second-largest reserve asset after the US dollar. This trend is driven by diversification efforts, geopolitical uncertainty, and de-dollarisation.
The return of gold to central bank portfolios
Central banks, particularly in emerging markets, have significantly increased their gold reserves since the 2007-08 global financial crisis.
This marks a reversal from the post-Bretton Woods era when gold was sold in favor of debt securities.
Since 2010, central banks have been net buyers, with purchases surging to over 1,000 tonnes annually between 2022 and 2024, before moderating to 850 tonnes in 2025.
Major buyers include China, Turkiye, Poland, and India.
This trend is driven by geopolitical uncertainty, de-dollarisation efforts, and gold's role as an inflation hedge.
The gold price mirrored this demand, reaching a record annual average of US$8,436 per fine ounce in 2025 and US$5,016 in February 2026.
Consequently, by December 2025, monetary gold accounted for approximately 28 percent of global reserve assets, surpassing the euro (15 percent) to become the second-largest reserve asset after the US dollar, whose share declined to 41 percent.
Diverging views, rising expectations
The 2026 World Gold Council survey revealed a significant divergence: 85 percent of emerging market central banks consider gold a geopolitical diversifier, versus 56 percent in advanced economies.
This explains the recent surge in purchases by emerging markets amid global tensions.
A growing number of central banks expect gold reserves to increase further, with emerging markets often "underweight.
" Poland, for example, targets 30 percent gold holdings.
For the South African Reserve Bank (SARB), reserve growth is price-driven, not purchase-driven.
Gold holdings as a percentage of South Africa's total reserves rose from 12.1 percent in 2022 to 23.0 percent in 2025.
A new era for reserve management
This trend reflects a fundamental shift in central bank reserve management, moving away from traditional currency reliance.
The sustained demand, particularly from emerging markets, underscores a strategic re-evaluation of risk and diversification in a volatile global landscape.
This repositioning suggests gold will continue to play an increasingly prominent role in international finance, challenging the long-standing dominance of fiat currencies.