Preserve Gold Explains: Why Central Banks Stockpile Gold

In periods of economic uncertainty or instability, many investors turn to gold, a precious commodity that has long been viewed as a "safe haven" asset. Unlike paper currency, gold is a store of value. There is a finite amount of it on Earth, and it will retain its purchasing power into the future—as it already has for centuries. As a leading precious metals firm, Preserve Gold helps individuals buy gold, silver, platinum, and palladium with zero hidden fees, a zero-fee buyback commitment, price matching, and secure and insured storage.

In late January 2026, gold reached a record high of $5,589 per ounce, up from $1,471 per ounce before the pandemic in March 2020. In addition to the pandemic, the last six years have been wrought with political and social unrest, rising geopolitical tension, inflation, and economic instability. Now, the advent of artificial intelligence (AI) is positioned to fundamentally change the economy and alter the workforce. It's no surprise that, as a safe-haven asset, gold has become more attractive both to individual investors and central banks.

The US dollar (USD) accounted for about 57% of all central bank reserves globally in early 2026, down from 66% 10 years prior. In June 2025, gold overtook the euro as the second-most important reserve asset; currently, central banks hold more than 35,000 tons of the metal, or about 20% of all the gold that has ever been mined. Many central banks have signaled that they are planning to increase their gold reserves—here's why.

Asset Diversification

Preserve Gold facilitates the purchase of gold and other precious metals for clients looking to diversify their retirement and investment portfolios. Broadly speaking, central banks invest in gold for similar reasons. They seek asset diversification, primarily to hedge against a potential weakening of their currency. With stagnant interest rates, banks may have to print more money to keep their economies afloat. This increase in money supply, however, can devalue their currency. Gold, as a finite, physical commodity with no credit risks, is an important asset for diversification.

In terms of value, the US had the world's second-largest gold reserves in 2024, trailing only the euro-area bloc. (On a country-by-country basis, the US comes in first.) American gold reserves were then valued at $682 billion, which represented about three-quarters of the total US central bank reserves, according to the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution. Individually, Germany, Italy, and France each had more than $200 billion in gold reserves. Russia's and China's gold reserves totaled $196 billion and $191 billion, respectively.

Hedging against Uncertainty

International conflicts, like the war between Russia and Ukraine, and increasing economic uncertainty have significantly altered global capital flows in recent years. Moreover, given the disruption of various global trade agreements, many central banks are turning to gold as a hedge against geopolitical risks associated with dollar assets.

Increasingly, dependence on the dollar may be much more of a vulnerability. In contrast, central banks are willing to pay a premium for gold because it is politically neutral and resistant to seizures.

Countries Boosting Their Reserves

Historically, the central banks of advanced economies were net sellers of gold. The US had about 17,636 tons of gold following World War II, but now has about 8,965 tons. The decline is mostly due to a combination of the 1971 end of the Bretton Woods international monetary system, which ended the gold standard; the US's large trade deficits in the post-WWII era; overseas military spending, including the Vietnam War; and a gold drain throughout the 1960s as foreign countries demanded gold for their dollar holdings. In more recent decades, US gold reserves have remained stable, and it is still far and away the global leader in total gold reserves.

Meanwhile, central banks in many developing countries and emerging economies have become net buyers of gold in recent years. China, Russia, India, and Turkey, in particular, have been increasing their gold reserves since the 2008 global financial crisis.

From 2015 to 2024, central banks in Russia and China had net purchases of gold of 1,012.1 and 570.2 tons, respectively. Poland's central bank had a net purchase of 380.6 tons of gold during the same period. Meanwhile, the central bank of Hungary tripled its gold holdings in 2021, driven by the need to hedge against pandemic-related risks and increasing inflation. In 2024, Hungary again increased its gold reserves from 104 tons to 121 tons as part of a long-term national economic strategy aimed at stability.

In 2025, the National Bank of Poland (NBP) was the top purchaser of gold among all central banks, buying almost double the amount of gold as the next-largest purchaser. NBP president Adam Glapiński emphasized the importance of gold to the Polish economy as an asset free of credit risks, able to withstand economic shocks, and unaffected by other countries' fiscal and monetary policies.