Central banks are turbocharging their gold reserves in 2025 as global distrust in U.S. fiscal stability and dollar assets explodes.

De-Dollarization Fuels Fourth Year of Massive Gold Buying by Central Banks

Amid escalating global tensions and a concerted move away from U.S. dollar reliance, central banks are increasingly turning to gold as a strategic reserve asset. Metals consultancy Metals Focus reported on June 5 in its annual gold market outlook that central banks are expected to purchase 1,000 metric tons of gold in 2025, marking the fourth consecutive year of significant official sector buying. Although this forecast represents an 8% decrease from the record 1,086 tons acquired in 2024, it indicates that central bank demand remains historically elevated.

Metals Focus emphasized that this trend is being propelled by ongoing efforts to reduce reliance on U.S. dollar-denominated assets, as central banks respond to growing concerns over the political and fiscal stability of the United States. In its report, the consultancy stated:

The drivers that have underpinned de-dollarisation in recent years remain firmly in place.

“If anything, President Trump’s unpredictable policy stance, his public criticism of (Fed chair) Jerome Powell and the deteriorating U.S. fiscal outlook have further eroded confidence in the U.S. dollar and Treasuries as ultimate safe-haven assets,” the firm explained. The report added that “elevated geopolitical tensions since the start of his administration have also curtailed the appeal of U.S. assets.” These developments, Metals Focus noted, are strengthening the case for gold as a politically neutral and non-liability-bearing reserve asset among central banks.

Despite a sharp rally in gold prices—up 29% so far this year, with a record high of $3,500 per troy ounce reached in April—central bank demand has not softened. First-quarter purchases were in line with the 2022–2024 average, with Poland, Azerbaijan, and China among the leading buyers. The report also highlighted consistent inflows into Iran, indicating continued activity by the Central Bank of Iran. Metals Focus projects the average gold price will rise by 35% in 2025 to $3,210 per ounce, citing ongoing economic uncertainty and declining trust in traditional safe-haven instruments as core factors sustaining demand.

Concerns about the U.S. dollar’s declining global dominance are increasing, driven by geopolitical tensions and fiscal instability. JPMorgan CEO Jamie Dimon and Tesla CEO Elon Musk have recently issued warnings highlighting these risks. Coinbase CEO Brian Armstrong has taken a more direct position, stating that bitcoin could ultimately replace the dollar as the global reserve currency. Meanwhile, countries within alliances such as BRICS and the Shanghai Cooperation Organisation (SCO) are accelerating de-dollarization by conducting more trade in national currencies.