The one-third of surveyed institutions planning to add gold represents a demand signal with genuine price implications: central banks and sovereign wealth funds operate at a scale where even incremental allocation shifts move the market, and the stated intention to increase holdings comes on top of two years of already elevated official sector buying. The tripling of central banks citing US debt as a negative for the dollar’s reserve role, from 20% in 2024 to 61% now, is the structural driver behind the gold pivot rather than a short-term tactical call, which makes it stickier and harder to reverse. With the bond-equity diversification relationship having broken down during recent inflation shocks, gold is filling the portfolio role that fixed income can no longer reliably play for sovereign allocators.
The custodian review findings add a further dimension: institutions quietly unwinding reliance on US financial infrastructure are simultaneously building non-dollar reserve buffers, and gold’s status as a neutral, sanction-proof asset sits directly in the path of that trend. For bullion markets, the combination of structural sovereign demand, dollar reserve anxiety, and geopolitical fragmentation argues for a well-supported price floor even as near-term energy price relief reduces one source of inflationary pressure.
—
One-third of sovereign wealth funds and central banks plan to increase gold holdings as 61% flag US debt as a long-term threat to the dollar’s reserve status, an Invesco survey found.
Summary:
- One-third of the 144 sovereign wealth funds and central banks surveyed by Invesco said they planned to increase gold holdings as part of a broad diversification drive away from dollar-denominated assets, per the report published Monday and conveyed by Reuters
- Some 61% of central bank respondents said US debt levels negatively affect the dollar’s long-term reserve currency status, up from 20% in 2024, with 29% expecting the dollar’s reserve role to be weaker in five years compared with 12% in 2022,
- Several institutions reported reviewing reliance on US-based custodians, counterparties and clearing infrastructure, with one European central bank confirming it had already replaced its US custodian and a Latin American institution building non-US custodial relationships as a contingency
- The positive bond-equity correlation seen in recent years has eroded the traditional diversification role of fixed income, pushing sovereign allocators toward real assets including gold and infrastructure
- Some 80% of respondents identified energy security and energy transition infrastructure as the most credible resilience investments, with infrastructure reaching 9% of sovereign wealth fund assets in 2026
- Invesco head of research Benjamin Jones said resilience had become a hard requirement rather than a preference, with institutions redesigning portfolios to withstand a wider range of outcomes amid inflation shocks and geopolitical fragmentation
A third of the world’s largest sovereign investors plan to increase their gold holdings, according to an Invesco survey published Monday, as deepening concern about US debt levels and the dollar’s long-term reserve status drives official sector capital toward assets that sit outside the reach of geopolitical pressure.
The survey of 90 sovereign wealth funds and 54 central banks, collectively managing $29 trillion in assets, found the gold accumulation intention sits within a broader and accelerating reassessment of dollar reliance. Some 61% of central bank respondents said US debt levels are damaging the dollar’s long-term position as the primary global reserve currency, a figure that has tripled from 20% in 2024 and represents the sharpest single-year deterioration in sovereign confidence in the greenback on record in the survey’s history.
Gold’s appeal in this environment is specific and structural. The breakdown of the traditional bond-equity diversification relationship, as the two asset classes moved in positive correlation through recent inflation shocks, has left sovereign allocators without the portfolio buffer that fixed income reliably provided for decades. Gold has stepped into that role, offering a real asset with deep liquidity, no counterparty risk, and no exposure to the US financial infrastructure that a growing number of institutions are quietly reassessing.
That reassessment of infrastructure is among the survey’s most striking findings. Several institutions told Invesco they were actively reviewing their reliance on US-based custodians, counterparties and clearing systems. One European central bank had already completed a switch away from its US custodian. A Latin American institution was building new non-US custodial relationships as preparation for a worst-case deterioration in relations with Washington. Gold, which requires no custodian of the kind that generates political exposure, is a natural complement to that trend: it can be held in allocated form outside the US-dominated clearing and settlement network entirely.
The dollar has not collapsed. It has risen around 3% this year, partly on safe-haven demand during the US-Israeli conflict with Iran, and survey respondents acknowledged that the absence of a credible alternative currency means any shift away from the dollar will be gradual and incremental. Renminbi potential as a reserve currency was noted but described as contingent on structural reforms not yet in prospect. Yet the directional signals are now consistent across multiple data points: 29% of respondents expect the dollar’s reserve role to be weaker in five years, against 12% in 2022, and the institutions making that assessment control enough capital to make it self-fulfilling at the margin.
The gold buying intention therefore lands not as a tactical inflation hedge but as a considered, long-horizon allocation decision by institutions whose time horizons are measured in decades. For bullion markets, that distinction matters. Central bank and sovereign wealth fund demand is characteristically patient, non-leveraged and insensitive to short-term price volatility, qualities that translate into a structural demand floor rather than a momentum-driven price spike. Combined with the broader energy and infrastructure rotation the survey documents, the picture is of sovereign capital systematically rebuilding portfolios around assets that can survive a world of fragmented geopolitics, unreliable correlations, and a reserve currency whose primacy is no longer taken as given.
This article was written by Eamonn Sheridan at investinglive.com.
