Gold prices year over year surpass expectations, with central bank purchases becoming the main driver

The trend of gold purchases by global financial institutions has created unprecedented market dynamics. Throughout 2025, international gold prices experienced a spectacular surge of over 64%, marking the largest annual growth achievement in nearly five decades. This phenomenon is not just a typical market fluctuation but a reflection of fundamental changes in how central banks and global financial institutions manage their reserves.

Gold Recovery: Marking Four Decades of Growth

The increase in gold prices over the past year exceeded all market analyst projections. This achievement became a main topic of discussion at the World Economic Forum, where policymakers and global financial leaders discuss strategies to adapt to global economic instability. Data shows that the momentum of gold purchases continues to be driven by measured and strategic institutional decisions. There is no compromise in choosing assets considered safe and stable during times of uncertainty.

Central Bank Strategies: Building Gold Reserves as a Value Guarantee

The behavior of central banks worldwide has undergone significant transformation in recent years. A comprehensive survey by the World Gold Council revealed that 95% of global central banks have expressed their commitment to continue increasing gold reserves in the future. This step is not merely a routine investment decision but a response to deep concerns about the resilience of the dollar-based international financial system.

Ray Dalio, founder of Bridgewater Associates, one of the largest asset management firms in the world, observed that gold has shifted to become the primary reserve instrument for central banks globally. Compared to dollar-denominated assets such as Treasury bonds, gold offers more substantial benefits: it carries no sovereign credit risk and continues to maintain its value over the long term.

From the Dollar to Diversification: Fundamental Shifts in Foreign Exchange Reserves

Data from the International Monetary Fund (IMF) provides a clear picture of the changing structure of global reserves. The share of the US dollar in total international reserves has fallen below 60%, reaching the lowest point in several decades of modern history. This decline is not coincidental but the result of planned strategies by countries to reduce their dependence on a single currency.

This de-dollarization phenomenon directly drives demand for gold as an alternative store of value. Developing economies and countries with large dollar reserves are reallocating their assets toward instruments perceived as more independent from the monetary policies of a single nation. Gold, with its thousands of years of history as a standard of value, offers that guarantee.

Long-term Trends: Implications for the Global Market and Financial Stability

The development of gold prices year over year reflects one major reality: the transformation of the global financial architecture is underway. Every gold purchase decision by central banks is a voice against the old system and support for a new balance in international exchange rate relationships.

Institutional investment in gold is no longer viewed solely as a defensive tactic but as a strategy to build a more robust and independent financial foundation. With 95% of central banks committed to expanding gold reserves, this trend is likely to continue shaping the global market architecture in the coming decades. Gold prices are projected to continue being influenced by geopolitical dynamics, monetary policies, and institutional asset allocation decisions.