Gold's jump: How a jittery world sent the glittery metal to new heights
Monetary authorities are hoarding gold again after decades of selling. This trend is led by emerging markets that are cautious about sanctions and dollar risks.
Gold has surged past $5,000 an ounce, rising 71 per cent in one year. This happens as central banks buy at record levels and diversify away from the dollar.
Why it matters
Central banks move slowly, until they don’t. Their shift back to gold shows a change. Governments now think differently about safety, sanctions, and reserve power. If more countries see dollar assets as risky, the dollar’s dominance could slip.
In numbers
- Gold: Hit $5,000/oz after rising about two-thirds in a year
- Gold’s role: about 17 per cent of global foreign reserves
- Official stock: roughly 40,000 tonnes held by central banks and the IMF (around 20 per cent of global gold stock, per WGC estimates)
- Richer valuation: central-bank gold value reached about 2.5 per cent of global GDP by the end of 2024
- Dollar share: down from about 71 per cent (1999) to about 58 per cent of allocated reserves
- Central bank buying: 863 tonnes in 2025 (about 20 per cent lower than 1,092 tons a year earlier); 1,045 tonnes added in 2024
In-depth
Gold’s rally looks dramatic, but the more interesting story is who’s buying and why. For thirty years, central banks ignored gold. This followed the collapse of the Bretton Woods system in 1971. They viewed it as outdated. They cut back on holdings and built large reserves in dollars, euros, and yen.
From 1971 to 2000, central banks' gold holdings fell by 10 per cent. At the same time, currency reserves grew fivefold. That confidence cracked after 2008. The US and the Euro area stopped being consistent sellers. Emerging markets began accumulating.
In 2022, a big event took place. Western governments froze Russian bank assets. This happened after Ukraine was invaded. Every reserve manager learned a key lesson. Foreign currency reserves are a geopolitical tool. Gold can’t be frozen with a legal notice.
The buying since then has been heavy enough to look structural, not tactical. Central banks purchased 863 tonnes in 2025, with emerging markets doing much of the lifting.
Meanwhile, the backdrop has shifted.
The dollar still dominates, but less so: its share of global reserves has slid from 71 per cent (1999) to 58 per cent (today). Gold’s share has climbed to 17 per cent, and gold as a share of global GDP is back to 2.5 per cent, the highest in a quarter-century.
Silver has followed along, almost mechanically. In 2025, silver did better than gold in percentage terms. This happened because of high demand from industries. Solar panels and electric vehicles drove this demand.
The trend isn’t uniform. Some countries went the other way. For example, Singapore dropped by 15 per cent and Russia by six per cent. This highlights the debate among economists: what is the cause, and what is the effect? Are central banks chasing rising prices, or are their purchases driving the rise? Or is the same third force (dollar uncertainty, geopolitics, fiscal strain) pushing both?
The data won’t settle that cleanly. But it does show a shift in behaviour: reserves are no longer just about liquidity and yield. They’re also about political insulation.
Animation
Big picture
Reserve assets are supposed to be boring. That’s the point. When central banks act like history matters, they choose a metal that pays no interest. They do this instead of choosing assets that do pay interest. This shows they don’t trust the system’s predictability. It’s not about convenience.
Gold’s comeback doesn’t mean the dollar is over. It means the world is pricing in a future where access to dollar assets may depend more on politics than it used to. Central banks are responding the way institutions often do: slowly, then all at once.
Gold has surged past $5,000 an ounce, rising 71 per cent in one year. This happens as central banks buy at record levels and diversify away from the dollar.
Why it matters
Central banks move slowly, until they don’t. Their shift back to gold shows a change. Governments now think differently about safety, sanctions, and reserve power. If more countries see dollar assets as risky, the dollar’s dominance could slip.
In numbers
- Gold: Hit $5,000/oz after rising about two-thirds in a year
- Gold’s role: about 17 per cent of global foreign reserves
- Official stock: roughly 40,000 tonnes held by central banks and the IMF (around 20 per cent of global gold stock, per WGC estimates)
- Richer valuation: central-bank gold value reached about 2.5 per cent of global GDP by the end of 2024
- Dollar share: down from about 71 per cent (1999) to about 58 per cent of allocated reserves
- Central bank buying: 863 tonnes in 2025 (about 20 per cent lower than 1,092 tons a year earlier); 1,045 tonnes added in 2024
In-depth
Gold’s rally looks dramatic, but the more interesting story is who’s buying and why. For thirty years, central banks ignored gold. This followed the collapse of the Bretton Woods system in 1971. They viewed it as outdated. They cut back on holdings and built large reserves in dollars, euros, and yen.
From 1971 to 2000, central banks' gold holdings fell by 10 per cent. At the same time, currency reserves grew fivefold. That confidence cracked after 2008. The US and the Euro area stopped being consistent sellers. Emerging markets began accumulating.
In 2022, a big event took place. Western governments froze Russian bank assets. This happened after Ukraine was invaded. Every reserve manager learned a key lesson. Foreign currency reserves are a geopolitical tool. Gold can’t be frozen with a legal notice.
The buying since then has been heavy enough to look structural, not tactical. Central banks purchased 863 tonnes in 2025, with emerging markets doing much of the lifting.
Meanwhile, the backdrop has shifted.
The dollar still dominates, but less so: its share of global reserves has slid from 71 per cent (1999) to 58 per cent (today). Gold’s share has climbed to 17 per cent, and gold as a share of global GDP is back to 2.5 per cent, the highest in a quarter-century.
Silver has followed along, almost mechanically. In 2025, silver did better than gold in percentage terms. This happened because of high demand from industries. Solar panels and electric vehicles drove this demand.
The trend isn’t uniform. Some countries went the other way. For example, Singapore dropped by 15 per cent and Russia by six per cent. This highlights the debate among economists: what is the cause, and what is the effect? Are central banks chasing rising prices, or are their purchases driving the rise? Or is the same third force (dollar uncertainty, geopolitics, fiscal strain) pushing both?
The data won’t settle that cleanly. But it does show a shift in behaviour: reserves are no longer just about liquidity and yield. They’re also about political insulation.
Animation
Big picture
Reserve assets are supposed to be boring. That’s the point. When central banks act like history matters, they choose a metal that pays no interest. They do this instead of choosing assets that do pay interest. This shows they don’t trust the system’s predictability. It’s not about convenience.
Gold’s comeback doesn’t mean the dollar is over. It means the world is pricing in a future where access to dollar assets may depend more on politics than it used to. Central banks are responding the way institutions often do: slowly, then all at once.