Why Central Banks Hold Gold
Central banks hold gold because it diversifies their reserves, carries no credit risk from any other government, and has a long history as a store of value during crises. After decades of net selling, central banks as a group became net buyers around 2010, and the World Gold Council reports their purchases topped 1,000 tonnes in each of 2022, 2023, and 2024.
What Central Bank Reserves Are
Every central bank holds foreign reserves: assets it can use to support its currency, pay for imports during a crisis, or meet international obligations. The International Monetary Fund's statistical standards count monetary gold as a reserve asset alongside foreign currencies (mostly U.S. dollars and euros), special drawing rights, and a country's reserve position at the IMF. Most reserves are held in government bonds and deposits, which earn interest. Gold earns nothing, so a central bank holding it is making a deliberate choice.
The Problem Reserve Managers Face
Reserve managers worry about the same things many households do, at a much larger scale: currency depreciation, inflation, and the creditworthiness of the governments whose bonds they hold. They also face a risk most households do not: reserves held in another country's financial system can be frozen by that country's government, as happened to a large share of Russia's central bank reserves in 2022. Gold, especially when stored domestically, is one way to reduce exposure to these risks.
Reasons Central Banks Give
The World Gold Council conducts an annual survey of central bank reserve managers. Reasons frequently cited for holding gold include:
- Long-term store of value and protection against inflation.
- Performance during crises, when other reserve assets may be under pressure.
- Diversification away from heavy reliance on any single reserve currency.
- No default risk, because physical gold is not anyone's liability.
- Geopolitical considerations, including the ability to hold an asset outside other countries' control.
These reasons echo some of the reasons individuals give, which is covered in our page on gold and geopolitical uncertainty.
Who Holds the Most
According to the World Gold Council's table of official gold reserves, the United States holds the largest national gold reserve, roughly 8,100 tonnes, followed by Germany. The IMF itself holds roughly 2,800 tonnes, making it one of the largest official holders. Several European countries keep a large share of their reserves in gold, while many emerging-market central banks hold a much smaller share and have been adding to it.
Official gold is typically held as large "Good Delivery" bars, which weigh roughly 400 troy ounces and must meet LBMA standards, including minimum fineness of 995 parts per thousand. The LBMA publishes the list of refiners whose bars qualify. Our guide to gold bars explains how these differ from the smaller bars individuals buy.
From Sellers to Buyers
The selling era
After the end of the Bretton Woods system in 1971, gold's role in official finance shrank. Through the 1990s and early 2000s, several European central banks sold large amounts. To make sales more orderly, a group of European central banks signed the first Central Bank Gold Agreement in 1999, limiting annual sales. Our history of the gold standard covers the earlier background.
The buying era
Following the 2008 financial crisis, central banks as a group turned into net buyers, according to World Gold Council data. Buying accelerated sharply in 2022, and the WGC reported purchases above 1,000 tonnes in each of 2022, 2023, and 2024, much of it by emerging-market central banks. Some purchases are reported to the IMF with a delay, and the WGC notes that a portion of estimated official buying is not publicly attributed to specific countries.
What It May Mean for Individuals
Central bank demand is now one of the larger forces in the gold market, alongside jewelry and bar-and-coin buying. Some analysts have linked strong official buying to gold's resilience during the interest-rate increases that began in 2022, as discussed in gold and interest rates. Central banks may also slow or reverse their buying, and their decisions are not predictable. Official demand is one input to the price, not a reason by itself to expect any particular outcome.
It is also worth remembering that central banks have different goals, time horizons, and constraints than individuals. A reserve manager holding gold for decades alongside a vast bond portfolio is in a different position from a household deciding how much metal to own. For that question, see how much of a portfolio might go to precious metals.
Individuals who want physical gold usually buy coins or smaller bars rather than Good Delivery bars. Our overview of gold coins available through Goldco shows the kinds of products one precious metals company lists, and our page on gold mining and global supply explains the supply side of the market central banks buy from.
Frequently Asked Questions
Which country has the most gold?
The United States holds the largest official gold reserve, roughly 8,100 tonnes, according to World Gold Council data compiled largely from IMF statistics.
Why would a central bank hold an asset that pays no interest?
Because gold may diversify reserves, carries no credit risk, and has historically held value during some crises. Central banks weigh those benefits against the income they forgo.
Are central banks still buying gold?
The World Gold Council publishes quarterly data on official-sector purchases and sales. Check its Goldhub for the latest figures rather than relying on past trends.
Does central bank buying set the gold price?
No single group sets the price. Central bank demand is one component of total demand, alongside jewelry, technology, and bar, coin, and fund purchases.