Global reserve systems are undergoing profound changes. Recent analysis indicates that the proportion of gold reserves held by BRICS nations relative to the total gold reserves of global central banks has risen to 17.4%, significantly higher than the 11.2% recorded in 2019. Concurrently, the US dollar's share of global foreign exchange reserves has fallen to its lowest level since 1994. Against this backdrop, gold is increasingly being viewed by central banks not just as a traditional safe-haven asset, but as a crucial instrument for long-term strategic allocation.
Michael Harris, a technical analyst at EBC Financial Group, noted in a report released on Tuesday that over the past three years, global central bank gold purchases have reached a scale unprecedented in modern history. He argues this is not a market behavior driven by short-term speculation, but a clear policy choice. Harris stated that the amount of gold purchased by central banks globally in 2025 even surpassed the annual mining output of some medium-sized gold-producing countries. The most notable characteristic of this demand cycle is its sustained, one-directional, and price-insensitive nature. In other words, sovereign buyers have been consistently absorbing market supply, regardless of whether gold prices were near $4,000 or $5,000 per ounce.
BRICS nations are undoubtedly at the forefront of this global gold acquisition trend. According to the report, BRICS member countries collectively hold over 6,000 tonnes of gold, accounting for approximately 17.4% of global official gold reserves. Specifically, Russia holds 2,336 tonnes, China holds 2,298 tonnes, and India holds 880 tonnes. Russia and China alone constitute about 74% of the group's total gold holdings. Harris also pointed out that between 2020 and 2024, central banks from BRICS countries accounted for more than half of all sovereign gold purchases globally. Furthermore, in just the first nine months of 2025, these nations added 663 tonnes of gold, valued at approximately $91 billion at prevailing prices at the time.
Harris identifies 2022 as a true turning point for this trend. That year, the US and its allies froze roughly $300 billion of Russian foreign exchange reserves amidst the conflict in Ukraine. This action sent a strong shockwave through the global central banking system, delivering a clear signal to all official institutions holding dollar-denominated assets that reserve assets stored within another country's financial system are not absolutely secure. It was following this event that the pace of central bank gold buying accelerated markedly, with annual purchases jumping from around 500 tonnes previously to exceeding 1,000 tonnes for three consecutive years. In contrast, gold stored within a nation's own vaults cannot be frozen or confiscated via the SWIFT system, significantly enhancing its strategic appeal.
In stark contrast to the rising share of gold reserves, the US dollar's portion within the global reserve system is in persistent decline. According to IMF COFER data, the dollar's share of global reserves has decreased from 71% in 1999 to approximately 57% by the end of 2025, marking the lowest level since 1994. However, Harris specifically notes that this change does not imply central banks are actively selling off dollar assets on a large scale. More accurately, the decline in the dollar's share is primarily due to the faster growth of reserves held in euros, yen, gold, and other non-traditional reserve assets. Essentially, the dollar maintains its dominant position, but its relative share is being gradually diluted.
Findings from the World Gold Council's 2025 survey further corroborate that this structural shift is being widely recognized by central banks globally. The survey revealed that 73% of respondent central banks anticipate the dollar's share of global reserves will continue to decline over the next five years. Simultaneously, 43% of central banks indicated plans to further increase their gold holdings, both figures reaching record highs. Harris highlights that gold's share of official reserve assets has risen from less than 10% in 2015 to over 23% currently. While part of this increase stems from the rise in the gold price itself, the overall direction is unequivocal: central banks are consistently raising the weighting of gold within their reserve portfolios.
From a market perspective, Harris believes that sustained central bank purchases are establishing an increasingly solid structural floor for the gold price. He notes that by early April 2026, the gold price had risen to around $4,660 per ounce, after having gained over 60% in 2025 alone. In this context, several major international banks have successively raised their gold price targets. Deutsche Bank points towards $6,000, J.P. Morgan offers a forecast of $6,300, Goldman Sachs expects prices could reach $5,400, while Société Générale even considers a $6,000 prediction to be conservative. Meanwhile, the World Gold Council anticipates that global central bank gold purchases in 2026 will still reach 750 to 850 tonnes, far above historical norms—a volume equivalent to roughly one-fifth of global annual mining supply. Harris contends that such stable and persistent official demand will make every market pullback shallower than in the past.
Beyond central bank demand, institutional capital and other long-term allocation forces are reinforcing this trend. Harris points out that inflows into gold-backed ETFs accelerated noticeably in 2025, and Chinese insurance funds have also begun pilot programs allowing gold allocations. When sovereign, institutional, and retail capital move simultaneously in the same direction, the supply-demand dynamics of the gold market tighten to an extent that traditional pricing models struggle to fully explain. This is also why the current gold price movement increasingly exhibits trend-like characteristics, rather than merely short-term safe-haven fluctuations.
The report also specifically highlights Saudi Arabia as potentially one of the most significant variables for the future gold market. Currently, Saudi Arabia holds approximately 323 tonnes of gold, but this represents only 2.6% of its total reserves. Harris notes that for a country with over $500 billion in reserves, this gold allocation ratio is actually quite low. If Saudi Arabia were merely to increase its gold allocation to 5%, the resulting additional purchase demand could equate to the entire expected demand from all global central banks in 2026. While Saudi Arabia has not publicly announced plans to increase gold holdings, Harris believes that as it joins BRICS, participates in the mBridge cross-border payment platform, and deepens ties with China, a strategic rebalancing of its reserve assets could very well extend to gold allocation.
In Harris's view, three types of events are particularly worthy of market attention going forward. The first possibility is China enhancing the transparency of its gold reserves and disclosing a holding size larger than expected, which would immediately serve as a significant market catalyst. The second possibility is Saudi Arabia or the UAE formally increasing their gold allocation ratios, signaling that new BRICS members are also following the path of Russia and China in reconfiguring their reserves. The third is the next IMF COFER data release continuing to show a decline in the dollar's share, as each step down further reinforces the logic for central banks to continue accumulating gold.
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