Central banks from the Global South are increasingly shifting their reserves towards gold, with nearly half expecting to expand their holdings within the next year. This trend, identified in a recent World Gold Council survey, contrasts sharply with advanced economies, where only a small percentage anticipate similar increases. The shift is primarily driven by geopolitical instability and rising trade protectionism, which have diminished confidence in the U.S. dollar as a reserve currency. The data indicates that gold's appeal is growing significantly as central banks look to safeguard their assets.
"The recent market developments around tariffs have raised questions on the safe-haven status of USD/UST, but have bolstered that of gold."
"The uncertainty stemming from the tariffs implemented and committed by the USA regarding trade policies in the recent period may reduce the interest in USD and USD-denominated assets as a reserve currency."
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