Central banks reduce US dollar exposure and increase gold reserves amid geopolitical tensions, says Deutsche Bank report.
New Delhi
Global central banks are reducing their exposure to the US dollar and increasing gold reserves amid rising geopolitical tensions, according to a Deutsche Bank analysis.
The bank notes that this shift is part of a broader “de-dollarisation” trend, where countries are diversifying reserve assets to reduce reliance on dollar-based financial systems. Central banks, particularly in emerging markets, are steadily increasing gold allocations as a hedge against economic uncertainty, sanctions risk, and global instability.
According to the analysis, gold’s share in global central bank reserves has already risen significantly over the past two decades, while the US dollar’s dominance has gradually declined. The trend has accelerated in recent years as geopolitical conflicts and financial fragmentation have increased demand for neutral reserve assets.
Deutsche Bank highlights that central banks have been among the largest buyers of gold since the 2008 financial crisis, accumulating hundreds of millions of ounces. This sustained demand has helped support gold prices and is expected to continue influencing global markets.
The report also points out that emerging economies are leading this shift, with several countries expanding gold reserves alongside diversification into other currencies. Analysts say this strategy reflects concerns over currency volatility, debt levels, and the weaponisation of financial systems.
Market observers note that the transition is not only financial but also geopolitical, as countries reassess long-term reserve strategies in a more multipolar world. Gold is increasingly seen as a “neutral asset” without counterparty risk.
Recent projections suggest that if current trends continue, central banks could further increase gold’s share in reserves over the coming decade, reinforcing its role as a key pillar of global monetary stability amid ongoing uncertainty.