Central banks increase gold holdings over geopolitical tensions

Nearly nine in ten central banks expect global gold reserves to increase over the next twelve months, according to the World Gold Council's annual Central Bank Gold Reserves survey. The survey of 74 central banks, conducted between February and May, found that 45 percent of respondents expect their own holdings to grow. Only one percent anticipate a decline.

Nine percent of respondents said they increased domestic gold storage over the past year, up from five percent a year earlier. Ten percent reported diversifying overseas storage locations, compared with two percent in the previous survey. Seven percent plan to increase domestic storage in the coming year, while nine percent expect to diversify overseas holdings.

Central banks have purchased an average of 1,000 tonnes of gold annually over the past four years, double the prior decade's average.

"The fear that the assets cannot be accessed abroad is, since 2022, driving some central banks to repatriate gold held abroad," Giovanni Staunovo, commodity analyst at UBS, told CNBC. Staunovo added that gold's symbolic significance as a national asset also encourages domestic storage.

U.S. holdings by selling gold there and buying an equivalent amount in Europe. Dan Coatsworth, head of markets at AJ Bell, said the findings reflect efforts to spread risks across both assets and storage locations.