Why Central Banks Hold Gold: A Short History of Gold in Official Reserves

Gold went from anchor of the monetary system, to an asset central banks sold, to one they bought above 1,000 tonnes a year from 2022 to 2024.

Key takeaways

Central banks hold gold for crisis performance, long-term value and diversification, the top three reasons in the World Gold Council’s 2026 survey.
From 1950 to 2021, gold’s share of advanced-economy reserves fell from 80% to 17% as central banks sold after Bretton Woods ended.
Central banks bought above 1,000 tonnes of gold a year from 2022 to 2024, versus a 473-tonne average from 2010 to 2021.

Central banks hold gold because it has no issuer that can default, it sits outside any other country’s monetary system, and it has held value through crises. Their attitude toward it has swung hard over 80 years: from the anchor of the monetary system, to an asset many sold, to one they bought at more than 1,000 tonnes a year from 2022 to 2024.

Here is how that happened, using official and industry data.

Gold as the anchor: Bretton Woods, 1944 to 1971

In 1944, 44 nations met at Bretton Woods, New Hampshire, and agreed to fix their currencies to the US dollar and the dollar to gold. Dollars were convertible to gold at $35 per ounce once the system became fully operational in 1958, according to the Federal Reserve’s history of the period. At the start, the United States held about three-quarters of the world’s official gold reserves.

Gold was built into the plumbing. The IMF says member countries paid 25% of their initial quotas in gold, and gold was used to pay interest and repay IMF credit until the early 1970s.

The weak point was arithmetic. By the 1960s there were more dollars held abroad than the US had gold to redeem them. On August 15, 1971, President Nixon closed the gold window: foreign governments could no longer exchange dollars for gold. The Smithsonian Agreement of December 1971 tried to keep pegged exchange rates, and the IMF dates the end of the par value system to 1973. The US Treasury still carries its gold on the books at a statutory $42.2222 per ounce, a rate set in 1973.

The selling decades

With gold no longer tied to currencies, its weight in reserves shrank. An IMF working paper published in 2023 shows gold’s share of reserves in advanced economies fell from 80% in 1950 to 17% by the end of 2021. In emerging markets it fell from 30% to 7% over the same span. Before the 2008 financial crisis, more central banks were selling gold than buying it.

Canada sold nearly all of its gold. Ottawa held more than 1,000 tonnes in the 1960s, was down to 3.4 tonnes by 2003, and by early 2016 had sold almost all of the rest, leaving 77 ounces of coins, CBC reported. The Finance Department cited a “long-standing policy” of selling physical commodities in favour of financial assets that are easily tradable.

European sales got large enough that the sellers agreed to pace themselves. The first Central Bank Gold Agreement, signed September 26, 1999 by 15 European central banks and the ECB, capped sales at 400 tonnes a year and 2,000 tonnes over five years. It also stated that gold “will remain an important element of global monetary reserves.” Later agreements set caps of 500 tonnes a year (2004 to 2009) and 400 tonnes a year (2009 to 2014). By the fourth agreement in 2014, signatories said they had no plans to sell significant amounts, and the ECB let the arrangement lapse in 2019.

The IMF also sold. In September 2009 its board approved sales of 403.3 tonnes, including 200 tonnes to the Reserve Bank of India. The IMF still reports about 2,814 tonnes of gold at designated depositories.

The turn: sellers become buyers

The IMF paper describes a swing after the 2008 crisis from more countries selling to more countries buying. Between 2000 and 2021, the largest buyers were Russia, China, Turkey and India, while Switzerland, France, the Netherlands and the UK were net sellers.

The World Gold Council puts average central bank buying at 473 tonnes a year from 2010 to 2021. Then the pace roughly doubled.

Period	Central bank net purchases	Source
2010 to 2021 (annual average)	473 tonnes	World Gold Council
2022, 2023, 2024	Above 1,000 tonnes each year	World Gold Council
2024	1,092.4 tonnes	World Gold Council
2025	863.3 tonnes	World Gold Council
Q2 2026	289 tonnes	World Gold Council
H1 2026	345.4 tonnes	World Gold Council

The largest reported buyer in 2025 was the National Bank of Poland at 102 tonnes, its second straight year at the top, according to the WGC. Kazakhstan added 57 tonnes and Brazil 43 tonnes. For more on this year’s data, see our breakdown of central bank gold buying in 2026.

Why they hold it: what reserve managers say

The World Gold Council surveys reserve managers every year. Its 2026 survey drew 76 responses, the most on record, and was reported on June 16, 2026. The reasons respondents gave for holding gold:

Performance in crises: cited by 90%.
Long-term store of value and inflation hedge: 84%.
Diversification: 83%.

In the same survey, 45% said their own institution expected to add gold over the next 12 months, a record, and 89% expected global central bank holdings to rise. Looking five years out, 74% expected the US dollar’s share of reserves to decline. Those are expectations of the respondents, not outcomes.

The IMF paper adds one more motive: reserve managers facing a risk of financial sanctions from major reserve-currency issuers have tended to raise their gold allocations.

By the numbers

Scale helps. The USGS estimates world gold mine production at 3,300 tonnes in 2025.

2025 central bank buying of 863.3 tonnes equals about 26% of estimated 2025 mine output (863.3 divided by 3,300).
That 2025 figure is about 1.8 times the 2010 to 2021 average of 473 tonnes, even though it was 21% below 2024.
Canada’s reserves went from more than 1,000 tonnes in the 1960s to 77 ounces in 2016. A 1,000-tonne holding is roughly 32 million troy ounces.

The point: official buying is now large relative to annual supply, which is why it shows up in discussions of what moves the gold price, such as our look at gold’s July to September 2026 move.

What to watch

World Gold Council Gold Demand Trends: quarterly central bank purchase totals, including the Q3 2026 report.
WGC monthly central bank statistics: country-level changes compiled from IMF International Financial Statistics.
Canada’s Official International Reserves: the monthly Department of Finance release shows what Ottawa holds.
The 2027 WGC Central Bank Gold Reserves Survey: whether the share of banks planning to add gold holds near the 2026 record of 45%.

Sources

Frequently asked questions

Why do central banks hold gold?

In the World Gold Council’s 2026 survey of 76 reserve managers, 90% cited gold’s performance during crises, 84% its role as a long-term store of value and inflation hedge, and 83% diversification. An IMF paper adds that institutions facing sanctions risk from major reserve-currency issuers have tended to raise gold allocations, since gold has no issuer that can default.

When did the US stop converting dollars to gold?

President Nixon closed the gold window on August 15, 1971, ending the right of foreign governments to exchange dollars for gold at $35 per ounce. The Smithsonian Agreement of December 1971 tried to keep pegged exchange rates, and the IMF dates the end of the par value system to 1973.

How much gold do central banks buy each year?

World Gold Council data show central banks bought an average of 473 tonnes a year from 2010 to 2021, then more than 1,000 tonnes in each of 2022, 2023 and 2024. Purchases were 1,092.4 tonnes in 2024 and 863.3 tonnes in 2025, and 345.4 tonnes in the first half of 2026.