Central Banks and Gold

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Central banks hold gold because it carries no default or counterparty risk, is nobody's liability and diversifies reserves away from the US dollar. Since 2022 they have bought more than 1,000 tonnes in each of 2022, 2023 and 2024, according to the World Gold Council, roughly double the pace of the previous decade, and this demand has become one of the main supports for the gold price.

Why central banks hold gold

  • No counterparty. A government bond is a promise by another state; gold held in your own vault is not. That matters when relations between countries break down.
  • Sanctions risk. The freezing of a large part of Russia's foreign-currency reserves in 2022 showed reserve managers that assets held abroad in other countries' currencies can be blocked. Gold stored at home is harder to freeze.
  • Diversification. Gold often moves differently from the dollar, euro and bond prices, so it can stabilise the value of reserves.
  • Crisis value. Gold keeps purchasing power over long periods and can be sold or pledged in emergencies. India, for example, pledged gold in 1991 to raise foreign currency during its balance-of-payments crisis.
  • Confidence. Visible gold reserves can support trust in a currency, especially for emerging-market central banks.

The buying surge since 2022

For most of the 1990s and early 2000s, European central banks were net sellers. That reversed around 2010, and official buying averaged several hundred tonnes a year through the 2010s. From 2022 it stepped up sharply: World Gold Council data show net purchases above 1,000 tonnes in each of 2022, 2023 and 2024, the highest annual totals in decades. Annual gold mine output is roughly 3,600 tonnes, so central banks have been absorbing more than a quarter of it.

Emerging-market central banks have led the buying. China's People's Bank, Poland's National Bank, the Reserve Bank of India and Turkey's central bank have been among the largest reported buyers, alongside others in Central Asia and the Middle East. Some purchases are not reported to the IMF, which is why total demand estimates exceed the sum of announced figures.

Largest official gold holders (approximate)

Figures are rounded and change as banks buy or sell; they are based on IMF and World Gold Council data and are labelled approximate.

HolderGold (tonnes, approx.)
United States8,133
Germany3,350
Italy2,450
France2,435
Russia2,330
China2,300
Switzerland1,040
India880
Japan846

The IMF itself also holds about 2,800 tonnes. Rich Western holders such as the US, Germany, Italy and France have kept their tonnage roughly steady for years; because gold has risen, it now makes up a large share of their reserves.

India's gold reserves

The Reserve Bank of India has been a steady buyer since 2017, lifting its holdings from about 560 tonnes to roughly 880 tonnes. It has also brought a large part of its gold back to India: in 2024 it moved around 100 tonnes from the Bank of England in London to vaults in India, and more than half of its gold is now held domestically, with the rest at the Bank of England and the Bank for International Settlements. Gold's share of India's foreign-exchange reserves has risen as both holdings and the price increased.

How central-bank demand affects the price

Official buyers behave differently from traders. They buy for strategic reasons, spread purchases over months and tend to keep buying when the price falls, which puts a floor under dips. Their activity is reported monthly or quarterly with a lag, so it explains the long-term trend more than daily moves (see why gold changes daily).

To put the scale in perspective: 1,000 tonnes is about 32.15 million troy ounces. At an illustrative US$4,150 per ounce, that is roughly US$133 billion of gold a year. The long-term pattern is visible on the 5-year chart above and in our gold price history.

Central-bank buying can slow if prices rise too far for reserve managers' budgets, and a large seller could weigh on the market. Treat official demand as one driver among several, not a guarantee.

Where to follow the data

  • The World Gold Council publishes quarterly demand trends and monthly central-bank statistics.
  • The IMF's International Financial Statistics report official holdings by country.
  • The RBI reports its gold holdings in its weekly statistical supplement and its foreign-exchange reserves management reports.

Day-to-day reactions are covered in our gold price news.

Frequently asked questions

Which country has the most gold?
The United States has the largest official gold reserves, about 8,133 tonnes, mostly stored at Fort Knox, West Point and Denver, with some at the Federal Reserve Bank of New York. Germany is second with roughly 3,350 tonnes.
Why are central banks buying so much gold?
Mainly to diversify away from the US dollar, to hold an asset that cannot be frozen or defaulted on, and as a hedge against financial and geopolitical crises. The 2022 freezing of Russian reserves accelerated the trend.
Where does India keep its gold?
The RBI holds more than half of its gold in India after bringing about 100 tonnes back from the UK in 2024. The rest is held with the Bank of England and the Bank for International Settlements.
Does central-bank buying mean gold will keep rising?
No. It provides steady demand and tends to support the price on dips, but investment flows, interest rates and the dollar can outweigh it. Official buying has also slowed in past periods when prices rose quickly.
Do central banks sell gold?
Some do, usually to raise local currency or manage reserves; Turkey, for example, has sold at times. Large coordinated sales by European central banks in the 1990s and 2000s were limited by agreements that have since lapsed.