Central banks quietly diversifying holdings as geopolitical tensions reshape assumptions about where reserves
are saf
KARACHI:
The Dutch central bank (DNB) has shifted 86 metric tons of gold from New York and Ottawa to London as part of “crisis preparedness” amid global political tensions. The bank held 612.4 metric tons of gold worth 72.2 billion ($83.6 billion) at the end of 2025.
The Netherlands’ decision points to a quiet shift in how central banks manage their gold reserves, raising questions about confidence in traditional Western custodial hubs and the future of reserve diversification. At the same time, it has drawn attention to a broader trend: central banks are increasingly re-evaluating where they keep their most important reserve asset.
The DNB move did not involve physically transporting all the bullion across the Atlantic. Of the 86 tonnes repatriated, 27 tonnes were physically moved from New York and Ottawa, while the remaining was sold in New York, with equivalent gold purchased in London through a book transfer. The arrangement avoided the costs and security complications involved in shipping bullion.
Nevertheless, the result was strategically significant. The share of Dutch gold held in New York dropped from 31.3% to 18.5%, while London emerged as The Hague’s largest gold custodian. The DNB move is part of a wider reassessment by central banks worldwide of the risks associated with holding reserves abroad.
In 2013, Germany announced plans to repatriate 674 tonnes of its gold from New York and Paris to Frankfurt. The move, according to the Bundesbank, was part of a programme to strengthen confidence in the country’s reserves. The programme had been completed ahead of schedule in 2017.
France made a similar but more discreet move. The Banque de France sold 129 tonnes of gold held in New York and acquired equivalent bullion in Europe between July 2025 and January 2026. This allowed Paris to scale back its exposure to America-based custody without physically transporting its gold across the Atlantic.
The trend was not limited to Germany and France. Serbia also began repatriating its gold in 2022, with President Aleksandar Vucic saying Belgrade did not know what the future might bring. By 2025, Serbia had brought every bar home.
Another eastern European country, Poland, also increased its domestic holdings. In 2019, then-central bank governor Adam Glapinski described yellow metal as an expression of national sovereignty, and Warsaw repatriated 100 tonnes from the Bank of England.
It would be wrong to interpret these decisions as a rejection of Western financial institutions. Neither do they suggest central banks are preparing for an impending collapse of the dollar-based global monetary system. However, they point towards a broader strategy of reserve diversification in anticipation of any geopolitical shock.
For many countries, Russia’s invasion of Ukraine became the catalyst for the diversification of reserves. The United States and its allies seized more than $300 billion in Russian foreign assets, demonstrating the extent to which financial infrastructure can become an instrument of geopolitical power.
Central banks worldwide were forced to reconsider a basic assumption: whether assets held within another jurisdiction remain fully accessible during a major geopolitical confrontation.
Gold occupies a special position in this calculation because, unlike government bonds or deposits, it carries no issuer’s credit risk. That helps explain the renewed “gold rush”. Central banks purchased more than 1,000 tonnes of gold annually in each of the three years from 2022 to 2024, according to industry data. Purchases remained elevated in 2025, when central banks acquired around 863 tonnes.
The trend has coincided with growing concerns over fiscal sustainability, geopolitical fragmentation and the long-term role of the greenback. However, it would be premature to write the epitaph of the dollar’s reign. The American currency remains deeply entrenched in international trade, financial markets, cross-border payments and global reserves. Its network advantages and deep liquidity give it considerable staying power.
What appears to be changing is the willingness of countries to depend on it – and on institutions within the Western financial system – without alternatives. Gold therefore functions as a hedge. The growing repatriation of gold by countries is not, by itself, proof of a synchronised campaign against the United States. Countries have different domestic, financial and geopolitical considerations. Some may prioritise physical control over reserves; others may favour liquidity, trading access or diversification among custodians.
But taken together, these decisions reveal a gradual but sustained erosion of the old assumption that the safest place for every country’s strategic reserves must necessarily be within the established Western financial system. For decades, vaults in New York, London and other major financial centres were regarded as pillars of the international monetary order. Central banks accepted the costs and risks of overseas custody because the benefits – security, liquidity and integration with global markets – were considered overwhelming.
The Ukraine war altered that calculation. The seizure of Russian dollar reserves showed that ownership and access are not always synonymous. An asset may legally belong to a sovereign state while its practical availability depends on the jurisdiction in which it is held and the geopolitical environment surrounding it. That lesson is likely to influence reserve management for years. The emerging “gold rush” should therefore be viewed less as a dramatic “exodus” from America and more as a quiet restructuring of sovereign balance sheets.
Central banks are keeping their options open. The Netherlands is only the latest example. Germany, France, Serbia and Poland have already proved that gold repatriation can be carried out gradually, discreetly and without disrupting international markets. The broader message is equally subtle. No major reserve currency loses its position overnight. Monetary orders change through accumulated decisions, diversifying reserves, reducing exposure, establishing alternative payment channels and reconsidering where strategic assets are held.
Gold cannot predict the future. But its movement can reveal what policymakers are increasingly worried about. And when countries begin bringing their most trusted reserve asset closer to home, the decision may say less about gold itself than about their changing assessment of the world around them.
THE WRITER IS AN INDEPENDENT JOURNALIST WITH A SPECIAL INTEREST IN GEO-ECONOMICS
