Gold's 2025 Resurgence: A Structural Shift in Global Reserves and ETF Demand

The global gold market in 2025 has witnessed a profound transformation, driven by a confluence of structural forces reshaping central bank behavior and investor demand. Central banks, long the cornerstone of gold's demand, have accelerated their purchases, while exchange-traded funds (ETFs) have surged as a vehicle for retail and institutional exposure. These trends are not merely cyclical but reflect a deeper reallocation of global reserves in a world increasingly skeptical of the U.S. dollar's dominance.

Central Banks: From Cautious Buyers to Strategic Accumulators

Central banks' gold purchases in 2025 have shattered historical norms. According to a report by the World Gold Council, central banks added 220 tonnes of gold in Q3 2025 alone, a 28% increase from the previous quarter. This momentum, though slightly tempered from the peak years of 2022–2024, remains robust. J.P. Morgan forecasts that central bank demand will average 585 tonnes per quarter in 2026, underscoring a sustained commitment to gold despite its elevated price.

The shift is emblematic of a broader de-dollarization trend. As stated by a J.P. Morgan research note, the U.S. dollar's share of global foreign exchange reserves has fallen to a two-decade low, with central banks increasingly reallocating reserves toward gold and other non-dollar assets. This reallocation is particularly pronounced in emerging markets, where nations like China, Russia, and Turkey have led the charge, viewing gold as a hedge against geopolitical risks and sanctions.

ETFs: A New Era of Institutional and Retail Demand

Global inflows into gold ETFs reached $72 billion year-to-date in 2025, equivalent to 674 tonnes, with North America accounting for 62% of this demand. This surge reflects a re-stocking of gold by Western investors, who had previously scaled back holdings during periods of high inflation and interest rates.

The resilience of ETF demand is underpinned by gold's evolving role in portfolios. As noted by WisdomTree analysts, gold is transitioning from a cyclical safe haven to a structural component of diversified portfolios, offering protection against macroeconomic volatility and currency depreciation. Projections suggest that ETF inflows could range from 114 to 455 tonnes in 2026, maintaining upward pressure on gold prices.

De-Dollarization and the Rise of Gold as a Reserve Asset

The structural shift in gold demand is inextricably linked to the erosion of the dollar's hegemony. Central banks now hold more gold than U.S. Treasuries for the first time in nearly three decades, a milestone highlighted by Visual Capitalist. This reversal is not accidental but a calculated response to the risks of over-reliance on dollar-denominated assets, particularly in an era of geopolitical fragmentation and sanctions.

Gold's appeal lies in its non-sovereign nature. Unlike fiat currencies or government bonds, gold is a universal store of value that transcends borders and political systems. As a report by J. Rotbart underscores, central banks are leveraging gold to diversify reserves, hedge against geopolitical uncertainties, and preserve purchasing power in an inflationary environment.

The Road Ahead: Structural Strength and Price Projections

Looking forward, the structural bull case for gold remains intact. J.P. Morgan projects that gold prices could climb toward $4,500–$4,900 per ounce by 2026, driven by sustained central bank demand, ETF inflows, and the broader de-dollarization trend. While short-term volatility is inevitable, the long-term trajectory is clear: gold is no longer a marginal asset but a core pillar of global reserve and investment strategies.

For investors, the implications are straightforward. Gold's resurgence in 2025 is not a fleeting phenomenon but a reflection of enduring structural shifts. As central banks and investors alike reallocate portfolios in a de-dollarizing world, gold's role as a diversifier and hedge will only grow in importance.