Central banks eye cuts to dollar reserves, boost gold holdings

Central banks are preparing the first net pullback from dollar holdings in the OMFIF survey series, with more reserve managers saying they plan to reduce U.S. allocations over the next 10 years than to add to them. The change is not a run on the currency, but it marks a clear shift in reserve strategy among institutions overseeing more than $10 trillion in assets.

OMFIF’s Global Public Investor 2026 survey drew responses from 90 central banks, public pension funds and sovereign funds, and found 79% of central banks think the international monetary system is moving toward a multipolar structure, compared with 60% of global public funds. Reserve managers said they were testing alternatives including the Norwegian krone, New Zealand dollar, sterling, the euro and the Chinese renminbi, a sign that diversification is broadening beyond a single rival to the dollar.

Gold is the sharpest expression of that shift. OMFIF said 82% of central banks now hold physical gold, and a net 30% of surveyed institutions plan to increase gold allocations over the next one to two years. The survey also showed 61% expect gold to settle between $5,000 and $6,000 an ounce by June 2027, while only 28% said today’s price is discouraging further buying. That helps explain why bullion has moved from a defensive holding to a core reserve asset.

The dollar remains dominant for now. International Monetary Fund COFER data put the greenback’s share of disclosed global foreign-exchange reserves at 56.77% in 2025 Q4, down from 56.93% in 2025 Q3, with total reserves at $13.14 trillion. The currency has also risen about 3% this year, supported by U.S. interest rates, demand for American assets and safe-haven flows tied to the U.S.-Iran war. But the OMFIF survey suggests that reserve managers are planning for a more fragmented system, not an immediate replacement for the dollar.

The pressure is not limited to currencies. OMFIF said 89% of developed-economy central banks reported some form of artificial intelligence implementation, against 44% of emerging-market peers, underscoring how public investors are adjusting their operations as geopolitics, inflation and technology reshape reserve management. OMFIF’s 2025 report had already found close to 60% of surveyed central banks were seeking to diversify within two years for resilience and risk management, and the latest results show that caution is deepening. For Washington, the consequences would arrive slowly: a less dollar-centric reserve system could eventually raise borrowing costs, narrow sanctions leverage and make global markets more sensitive to shifts in central-bank demand.