The global appetite for gold has intensified dramatically, driven by record central bank buying intentions and shifting monetary policy expectations after an oil market rout. A new survey from the World Gold Council reveals that 45% of central banks plan to increase their gold reserves over the next 12 months, the highest level in the survey’s history and a sharp rise from 29% in 2023. Only 8% expect to reduce holdings, the lowest ever. The 2024 Central Bank Gold Reserves Survey, covering 70 institutions, found that 74% of respondents believe gold’s role as a reserve asset will grow over the next five years, citing its crisis performance, lack of default risk, and inflation-hedging qualities. Emerging economies in Asia and the Middle East are leading the trend, seeking diversification away from the U.S. dollar—a reaction accelerated by the 2022 freezing of Russian central bank assets.
Simultaneously, gold prices extended gains as a slump in crude oil prices dampened expectations for further aggressive Federal Reserve interest rate hikes. Lower energy costs act as a disinflationary force, potentially giving the Fed room to pause its tightening cycle. According to CME Group’s FedWatch Tool, the probability of a near-term rate hike dropped significantly, weakening the U.S. dollar and boosting gold’s appeal. The inverse correlation between gold and the dollar strengthened, with investors rotating out of energy-linked assets into the precious metal. This dual catalyst—sustained institutional demand from central banks and a more dovish Fed outlook—has propelled gold to repeated all‑time highs and signals a fundamental reshaping of reserve management strategies worldwide.
