The Strategic Importance of Gold
Gold is still an economically strategic asset in the world, with central governments and investors impacting its supply, demand, and price. The United States accounts for most world gold reserves – approximately 8,133.5 tonnes as of 2025 – significantly more than the next in line. Germany, Italy, and France follow as the major holders, while Russia and China round out the top five. In addition, Switzerland, India, Japan, Turkey, and the Netherlands all have sizable reserves. These official reserves are enormous: altogether, central banks hold about 35,940 tonnes of gold, over a fifth of all gold ever mined, as shown in the World Gold Council’s 2025 country data.
Changing Nature of Global Gold Reserves
The nature of these reserves has changed over time. Historically, the big Western powers dominated gold. Eight of the top ten central banks with the most gold in 2000 were in Europe or Japan, but now emerging economies are taking over. For instance, China has increased its gold reserves threefold in the past twenty years. China’s gold reserves rose from 2019 to 2024 by approximately 331 tons. India’s central bank has also bought gold in large quantities: its holdings have increased from circa 635t in 2019 to 876t in 2024. Poland, which bought around 100 tonnes in 2022–23, and Turkey are other new buyers. Conversely, the United States and most experienced holders have had more or less constant levels for decades; the US has held about 8,133 tonnes since 1951. Central banks in Poland, China, Kazakhstan, and Uzbekistan have continued buying gold in the last several months. Central banks bought 1,037 tonnes in 2023, the second-highest annual total on record, and over 1,045 tonnes in 2024, according to the World Gold Council’s 2024 gold market commentary. Central banks globally purchased over 1,000 tonnes of gold in each of the past three years. This indicates a consistent shift towards utilizing gold.
Gold Supply, Mining, and Recycling Trends
At the same time, the output of gold mining has continued to be stable or increase. Global mine production reached a record level in 2024 when about 3,661 tonnes of gold were extracted, about 1% more than in 2023, as reported in the Gold Demand Trends Full Year 2024. While many recent production gains have been in mines outside the Old West, all the major miners have massive operations worldwide. Scrap gold recycling also adds to the supply: 2024 recorded an 11% increase in recycled gold. Total gold supply (mining plus recycling) in 2024 stood at approximately 4,975 tonnes, a three-decade high. In the near term, analysts see minimal growth in mine production, with limited discoveries and increasing costs limiting growth.
Gold’s Role in National Wealth and Financial Security
Gold has had value for national wealth and monetary systems for a long time. During the gold standard, paper money was convertible to gold, and governments needed gold to support their money. Even when the US’s gold standard was terminated in 1971 and the Bretton Woods system ended in 1973, countries still maintained gold as a safe and liquid way of saving value. Central banks say gold is secure and easy to sell, the two most important reasons they keep it. Gold doesn’t have credit risk like bonds or shares, nor does it depend on others; it can easily be sold or used during a crisis.
Gold also protects against inflation and currency movements. During difficult times, investors and governments usually choose gold to preserve their money’s value. A recent survey by the World Gold Council found that almost all central banks believe gold in reserves is a hedge against economic or financial problems.
Geopolitics and the Modern Appeal of Gold
Geopolitics has added to the charm of gold. Countries facing international sanctions or unstable political situations tend to buy gold as a safeguard; for example, Russia and China accelerated their buying when Western sanctions were looming. Gold is not linked to any nation’s currency or monetary system and so cannot be devalued or frozen by foreign-policy decisions. This partly accounts for the recent purchases by emerging-market central banks: rising Asia-Pacific and Central Asian economies—China, India, Kazakhstan, Uzbekistan, etc.—have deployed gold as a buffer against dollar dependence and external shock. Even affluent reserve managers like Switzerland have significant amounts of gold relative to the size of their economy. Gold usually makes up just a small fraction of a country’s foreign reserves (usually under 10%), but this share has been increasing. Nearly all of the central bankers surveyed expect to increase gold’s share of reserves in the coming years as a deliberate move against dollar volatility and inflation. Central banks now consider their ownership of gold as a kind of insurance in an uncertain world.
BRICS and the Future of Gold
The BRICS nations of Brazil, Russia, India, China, and South Africa came together from 2009 to 2010 to offer a platform for the large emerging economies. It has emerged as a significant player globally in gold. The BRICS countries represent a major share of the world economy—more than 30% of GDP and 40% of population—and play an important role in commodity markets. In 2023, the grouping enlarged (called BRICS+) to include six new members: Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and UAE, effective January 2024, with the objective of establishing a more balanced world order. The BRICS movement wants to reshape the world order and provide a greater voice for the Global South. It also launched the New Development Bank (the “BRICS Bank”) in 2015 to fund infrastructure and green projects in member countries. Gold plays a vital role in the BRICS intentions. The BRICS central banks hold a combined 5,700 tonnes of gold, about 16% of the world’s official reserves .
Over the past two decades, their gold holdings have roughly doubled because they wished to be less dependent on the US dollar. Nonetheless, gold constitutes a minor fraction of BRICS reserves (around 10% of overall reserves for BRICS+) and only half the world average. Nevertheless, these nations see gold as a proper substitute for the dollar.
Several BRICS countries are now buying much more gold. For example, from late 2024 through 2025, China’s central bank quietly bought gold for four months. Other BRICS countries, such as India and Kazakhstan, have also announced that they are buying new amounts of gold. De-dollarization—shifting trade and reserves away from the US dollar—is one of the main BRICS goals. In recent summits, the leaders have discussed using national currencies (yuans, rubles, rupees, etc.) for bilateral trade.
They are even considering a standard BRICS payment system and currency. The group is regarded as a currency on blockchain, backed partly by gold and partly by their currencies. A gold-backed digital BRICS currency is being discussed to reduce transaction fees and bring stability. Per this proposal, physical gold reserves will support each digital unit.
In the meantime, bilateral trade agreements among countries demonstrate this pivot: in 2023, China-Russia trade was almost entirely (close to 90%) in yuan or rubles, and India does most of its energy trade (e.g., with Russia) in rupees or rubles. In brief, BRICS countries regard gold as a highly regarded asset and a path toward financial sovereignty. They have stated they would prefer to create alternatives to the dollar system, and their increasing gold reserves suggest support for those objectives. Although a “BRICS currency” is not imminent, the ongoing gold accumulation and focus on BRICS trading indicate that gold will continue to play an essential role in their conception of a new world order.
Key Takeaways
- The United States holds the largest official gold reserves, with over 8,100 tonnes as of 2025.
- Central banks worldwide hold about 35,940 tonnes of gold, more than a fifth of all gold ever mined.
- Emerging economies, especially China, India, Poland, and Turkey, are rapidly increasing their gold holdings.
- Central banks have purchased over 1,000 tonnes of gold annually for the past three years.
- Global gold supply reached a three-decade high in 2024, driven by record mine production and recycling.
- BRICS nations are boosting gold reserves to reduce reliance on the US dollar and explore new financial systems.
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Source: cmi-gold-silver.com
