Central banks are giving the US dollar a “gold” shoulder by stacking their reserves with gold bars. Despite record gold prices, central banks from advanced economies are embracing gold, reducing their dependence on the US dollar. Gold is valued for its stability in crises — causing central banks to invest in this diversifiable and geopolitically neutral asset to hedge against uncertainties.

• Gold gains favor: Approximately 60% of central banks in wealthy nations predict an increase in gold’s global reserve share over the next five years — up from ~38% last year, reports the World Gold Council.
• Dollar’s decline: The International Monetary Fund notes a decrease in the dollar’s share of global foreign exchange reserves, dropping from over 70% in 2000 to ~55% by 2023.

Less bang for the buck: Nontraditional currencies like the Chinese renminbi, Australian dollar, and Canadian dollar have increased their combined share of global reserves from under 3% to nearly 12%. While some experts, like those at Morgan Stanley, argue that the dollar can’t be dethroned, countries such as Russia are finding ways to reduce their reliance on it.

Note: This article has been corrected to accurately reflect that the 60% figure pertains to central banks’ anticipation of an increase in global gold reserves rather than their plans to add gold to their own reserves, as previously stated.