Gold Becomes World’s Leading Reserve Currency as Central Banks Accelerate Purchases

Gold has overtaken the U.S. dollar as the world’s primary reserve currency, according to recent market analysis. Central‑bank demand remained a structural pillar in Q1, with official‑sector purchases reaching 244 tonnes – the fastest pace in over a year and above the five‑year average. Poland, Uzbekistan and China led the buying, using the March price correction as an entry point, while sellers such as Turkey, Russia and Azerbaijan off‑loaded around 115 tonnes for reasons ranging from currency defence to budget financing.

The price of spot gold hovered in a narrow $4,500‑$4,800 range after a brief dip below $4,500 was quickly absorbed by central‑bank buyers and Chinese traders, as reflected in a surge in the Shanghai premium. The market dynamics occurred amid heightened geopolitical tension from the U.S.–Iran conflict and the ongoing closure of the Strait of Hormuz, which kept oil prices volatile and reinforced the need for the U.S. dollar during global liquidity strains.

Despite limited new buying, there were no significant sellers, and the lack of a clear directional trend suggests gold’s role as a safe‑haven asset is solidifying. Analysts note that much of the official purchasing is undisclosed, implying the true appetite may be higher than reported.