FX.co ★ Central banks move gold out of US on geopolitical fears

Central banks around the world have entered emergency gold‑buying mode and begun actively moving reserves out of the United States. Goldman Sachs data showed that regulators purchased 79 tons of the metal in August alone, more than four times the historical norm. Before 2022, average monthly purchases ran at a modest 17 tons.

Geopolitics is the main driver of the frenzy. Conflicts in the Middle East and Eastern Europe, combined with an increasingly aggressive US tariff stance, have undermined confidence in dollar reserves. China has been the largest buyer: in August, Beijing added about 25 tons to its vaults as part of a steady campaign to reduce reliance on G7 currencies.

For advanced economies that have historically held large gold stocks, the challenge has shifted from how much to hold to where to store it. Confidence in US vaults is waning. According to Goldman Sachs, holdings at the Federal Reserve Bank of New York fell by some 40 tons in August, while the Bank of England’s stocks rose by 46 tons over the same period.

European central banks have repatriated or redeployed bullion under a variety of pretexts. The Dutch central bank (DNB) explicitly cited growing geopolitical instability and moved 86 tonnes from New York to London to ensure rapid access in a crisis. France’s central bank took a more diplomatic tack: it sold 129 tons in New York while buying the same amount in Europe, explaining the swap by saying the US bars “failed to meet” a 99.99% purity benchmark.

The trend toward secrecy is intensifying. Surveys indicate an increasing number of central banks are cloaking the locations of their holdings and planning further diversification of storage outside the United States.