Abstract:
I examine how governments have managed their holdings of gold and dollar reserves in recent decades, a period when gold's share of aggregate international reserves rose and the dollar's share fell. Using data on central banks' reserve currency composition and official sector purchases of U.S. assets, I argue that gold reserve accumulation is generally not associated with de-dollarization of international reserves at the country level, except in a few prominent cases. Instead, gold purchases are more consistent with most countries pursuing a modest diversification of international reserves that does not solely target a reduced dollar share. My evidence suggests that this characterization also applies to gold reserve accumulation in 2022 and 2023. Finally, I show that, while gold's importance as a store of value for the official sector has grown since 2000, its use as a unit
of account and a medium of exchange remains limited.
Keywords: International Reserves, Gold, Dollar
JEL Codes: F3, F31, F33
I use data on net purchases of U.S. assets by foreign official investors to study the relationship between central bank demand for gold and U.S. assets at the country level. In popular discussion, a central bank accumulating gold is often viewed as a sign that the central bank is de-dollarizing its international reserves-sharply reducing the share of reserves held in dollar assets to fairly low levels.1 Indeed, the dollar's share of aggregate international reserves has declined while gold's share has increased (Arslanalp et al., 2022, 2023). Russia has also served as a prominent example of a central bank acquiring nearly 2000 metric tons of gold while selling off its dollar reserves. Yet, data limitations make it difficult to determine if gold reserve accumulation and diversification away from dollar reserves is a broad-based trend or if it reflects decisions by a few central banks. This study is the first to investigate these connections using data on net purchases of U.S. assets by foreign official investors at the country level.2
I show that, despite growing gold reserves and a declining dollar share in aggregate, most countries do not de-dollarize their reserves when they accumulate gold. Rather, for these countries, gold reserve purchases result in a modest diversification of international reserves away from all foreign currencies.3 Examining countries that have accumulated gold since 2000 and publicly disclose the currency composition of their foreign exchange reserves, I find that the three countries with the largest purchases of gold reserves-China, Russia, and Türkiye-significantly reduced the dollar share of their reserves as they accumulated gold. Outside these three, however, there are few examples of countries that added to their gold reserves while meaningfully lowering the dollar share. Since most of the countries that have added to their gold reserves since 2008 did not disclose the currency composition of their foreign exchange reserves while they accumulated gold reserves, I turn to other data to further assess how important de-dollarization is for gold reserve purchases.
Specifically, I find that smaller official sector net purchases (or greater net sales) of U.S. assets are generally not associated with larger net purchases of gold reserves at the country level from 2012-2023. Smaller official sector net purchases of U.S. assets are also not associated with larger net purchases of gold reserves for just 2022 and 2023, after the G7 governments sanctioned the Russian government by blocking its access to its international reserves held in the sanctioning countries.4 In fact, larger net official sector purchases of U.S. assets correlate with larger gold reserve accumulation in these years, and regression analysis also indicates that countries buying gold reserves in 2022 and 2023 were more likely to buy U.S. assets in these years compared to the years before 2022.5 I argue that my findings are not driven by a few influential observations or a new set of central banks purchasing gold after 2021. Thus, while China, Russia, and Türkiye, who accumulated gold while diversifying away from the dollar, account for most of the gold reserve purchases since 2008, most of the countries that have purchased gold over this period do not appear to have done so while de-dollarizing. Moreover, gold reserve purchases in 2022 and 2023 did not occur alongside greater diversification away from the U.S. dollar.
The above analysis focuses on gold's role as a store of value for the official sector. In the last part of the paper I explore gold's ability to fulfill the unit of account and medium exchange functions of an international currency. For the official sector, this refers to whether gold serves as an exchange rate anchor and is used for exchange rate interventions. Zimbabwe appears to be the only country that anchors its exchange rate at least partially to gold. Gold's use in exchange rate interventions also appears limited, particularly for interventions involving international reserves sales. I show that countries only tend to sell their gold reserves when they have meager amounts of international reserves held in foreign currencies. Given the complementarities between the three functions of international currencies, these findings may suggest that gold's importance for international reserves faces a somewhat limited ceiling.
The main contribution of this paper is to study the importance of diversification away from the dollar for the build-up in gold reserves in recent years. As such, I build on existing work studying central bank gold reserves, most recently Arslanalp et al. (2023) and McDowell (2023) but also earlier papers by Ghosh (2016), Gopalakrishnan and Mohapatra (2018), and Oztunc and Orhan (2021). Arslanalp et al. (2023) identify a set of 14 "active diversifiers", countries that substantially increased their volume of gold reserves and gold's share of their international reserves. My results suggest that the set of countries accumulating gold and de-dollarizing is likely even smaller. Since I consider the link between demand for gold and dollar reserves, I also relate to several recent papers studying the currency composition of international reserves (Arslanalp et al., 2022; Chinn et al., 2024; Goldberg and Hannaoui, 2024; Iancu et al., 2022; Ito and McCauley, 2020). In particular, by exploring how widespread gold accumulation and dollar diversification is across central banks I connect to papers that have studied whether diversification of foreign currency reserves away from the dollar is broad-based (Arslanalp et al., 2022; Goldberg and Hannaoui, 2024). Finally, there is a large related literature that studies the safe haven and hedging properties of gold relative to other assets (Abid et al., 2020; Baur and McDermott, 2010; Baur and Smales, 2020; Burdekin and Tao, 2021 are among the examples.) I contribute by examining how central banks, an important piece of the market for gold, allocate between gold and U.S. assets.
Central bank gold holdings peaked in absolute terms at the height of the Bretton Woods system in the mid-1960s, as shown in the top left of Figure 1, and then generally declined over the next 40 years.6 After the Bretton Woods system collapsed in 1971, advanced economy central banks gradually reduced their gold reserves, while emerging and developing economy central banks added only a small amount to their gold reserves before 2008. In the midst of the Global Financial Crisis, this longstanding trend changed, and emerging market central banks began accumulating larger amounts of gold while the decline in aggregate advanced economy gold reserves ceased. Arslanalp et al. (2023) suggest that increases in the volatility of dollar exchange rates and in the level of global economic policy uncertainty in the aftermath of the Global Financial Crisis contributed to increased demand for gold reserves. Additionally, the growing use of financial sanctions by the U.S. government appears to have pushed governments to diversify some of their international reserves into gold (McDowell, 2023). Finally, as shown in the top right of Figure 1, not only did aggregate gold reserves increase after 2008, but the number of countries purchasing gold each year also increased, averaging roughly 26 per year from 2002-2008 and 34 per year 2009-2024.
Gold's share in international reserves has also risen since the end of 2008 from 9 percent at that time to 16 percent in 2024, as shown in the bottom of Figure 1. This remains far below the dollar's share of international reserves (around 42 percent in 2024 and 58 percent of foreign exchange reserves) and is at least in part driven by recent increases in the nominal price of gold rather than just increased gold accumulation (Bertaut et al., 2025).7 Nevertheless, in aggregate, gold's share of international reserves has trended up over the past decade while the dollar's share has moved down, suggesting that at least some of this gold accumulation reflects diversification away from the dollar. Whether this trend is broad-based or reflects decisions by a few central banks is the subject of the next section.
Ideally, country-level data on the composition of central banks' international reserves would be used to understand how those accumulating gold reserves have managed their dollar reserves at the same time. Such data are not consistently available to undertake econometric analysis even with recent datasets compiled by Ito and McCauley (2020) and expanded by Arslanalp et al. (2022). For example, 62 countries have a larger volume of gold reserves at the end of 2023 compared to the end of 2008, but less than 30 of these countries disclose the currency composition of their foreign exchange reserves in the years they accumulate gold.
At the same time, a general theme is suggested by the available data. Namely, while a few countries clearly accumulated gold as they diversified their foreign exchange reserves away from the dollar, most of the countries with currency composition data available did not. At the same time, these few central banks that did diversify away from the dollar account for most of the gold reserves accumulation. In particular, Russia and Türkiye built up their gold reserves at the same time that the dollar share of their foreign exchange reserves fell dramatically to levels below 50 percent, consistent with de-dollarization.8 While less clear due to data limitations, China also stands as an example of a country that accumulated gold reserves at thesame time it made a major reduction in the dollar share of its foreign exchange reserves.9 Since most of China's foreign exchange reserves continued to be held in dollar assets, this is more a case of substantial diversification away from the dollar without de-dollarizing.10 Together, these three countries are responsible for 64 percent of gold reserve accumulation after 2008.
Besides these three countries, it hard to find examples of gold reserve accumulation and clear diversification away from dollar reserves. Poland, the fourth-largest buyer of gold since 2009, began building its gold reserves in 2017. In the five years before 2017, the dollar share of its foreign exchange reserves averaged 38 percent, but its dollar share rose to 41 percent in 2023 during this period of gold accumulation. The dollar share of South Korea's foreign exchange reserves only temporarily declined from 64 percent to 58 percent when it accumulated gold reserves from 2011-2013, as it rebounded in 2015 and has remained above 65 percent since. Mexico also accumulated gold reserves in the early 2010s; although they did not disclose the currency composition of their international reserves at that time, they currently hold just over 90 percent of their foreign exchange reserve in dollars. Thus, it seems implausible that their gold accumulation resulted in a large diversification away from the dollar. Other examples include Brazil accumulating gold in various years from 2011-2021 and maintaining a dollar share of foreign exchange reserves above 80 percent throughout and Bangladesh buying gold from the IMF in the immediate aftermath of the Global Financial Crisis and also increasing the dollar share of foreign exchange reserves substantially after 2012 (from 50 percent in 2011 to over 80 percent in every year after 2013). For a more complete list of countries, see Table A1 in the Online Appendix.
To study the relationship between gold and dollar reserves more formally, I analyze a panel of country-level net purchases of gold reserves alongside net official sector purchases of U.S. assets. In particular, I seek to understand whether there is a negative correlation between a government's net purchases of gold reserves and its net purchases of U.S. assets in a given year, which would be consistent with diversification away from dollar reserves being a primary motivation for gold reserve accumulation.11 To that end, I estimate the following specification:
| $$GoldPur_{i,t}=\alpha_{i}+\delta_t+\beta USPur_{i,t}+\gamma'\mathbf{x}_{i,t}+\varepsilon_{i,t}$$ | (1) |
A negative estimate of $$\beta$$ implies that a government selling U.S. assets in a given year would be expected to purchase gold reserves, consistent with diversification away from dollar reserves being a primary motive for gold reserve accumulation.
The vector x is a set of controls for other factors that may influence a country's gold reserve allocation and may be correlated with its reserve purchases of U.S. assets. Specifically, I include annual real GDP growth, annual inflation, annual appreciation of the local currency against the dollar, and the ratio of total international reserves to nominal GDP.12 Real GDP growth is meant to capture income or wealth shocks that mayprompt greater overall reserve accumulation.13 I include inflation since gold is commonly viewed as a hedge against inflation, so higher inflation may prompt reserve demand for gold. I also use appreciation of a country's local currency against the dollar as another control since countries may lean against currency appreciation with purchases of international reserves, including gold. Finally, I include foreign exchange reserves (excluding gold) as a share of GDP to control for some measure of reserve adequacy, like McDowell (2023). This is meant to capture when countries have enough liquid foreign exchange reserves and can instead invest in gold.14 All control variables are sourced from the IMF's World Economic Outlook or International Financial Statistics (IFS). The regressions also include country and year fixed effects.
The outcome variable, $$GoldPur$$, is annual net reserve purchases of gold. I measure this in millions of dollars in order to compare the magnitude of gold reserve accumulation to official sector purchases of U.S. assets directly. For each month in a given year, I compute net purchases by taking the change in gold reserve holdings (measured in fine troy ounces) and multiplying by the average gold price in that month; I then sum across months to get annual net purchases. Changes in gold reserves generally come from the IMF's IFS with a few exceptions that are adjusted based on data from the World Gold Council's estimates for individual countries.15 Specifically, the World Gold Council data try to capture only changes in gold holdings that come from active purchases or sales rather than other methods. Most notably, the World Gold Council estimates differ for Türkiye, whose reported reserves also change due to changes in gold deposited at the central bank by commercial banks to meet reserve requirements, though there are smaller differences for Australia as well.16
Official sector purchases of U.S. assets are taken from the monthly Treasury International Capital (TIC) data that inform the balance of payments statistics for the U.S. At the country level, official sector flows are confidential. I specifically consider net flows into short-term liabilities of U.S. financial institutions, U.S. Treasuries, agency securities, and equities. For the latter three asset classes in particular, I use estimates of net purchases following the methodology of Bertaut and Tryon (2007) and Bertaut and Judson (2014, 2022) that measures flows using valuation-adjusted changes in positions given the potential issues with the transactions data prior to 2023. For 2023, I use reported transactions in the TIC data given changes to reporting methodology (Bertaut and Judson, 2023; McCallum et al., 2024). The sample begins in 2012, corresponding the to the introduction of monthly holdings data.17 Finally, while central banks hold dollar reserves in assets issued by entities outside the U.S., most dollar reserves appear to be held in U.S. assets (McCauley, 2019).
Two additional notes about data and sample construction are also worth mentioning. First, I measure net official sector purchases of gold and U.S. assets in several different ways to mitigate the effect of extreme values. Besides using net purchases in millions of dollars in the regressions, I also report results for regressions that use the inverse hyperbolic sine of net purchases in millions of dollars as well as standardized net purchases.18 Second, I drop four countries from the regressions. I exclude Russia because its official sector was banned from transacting in U.S. assets as part of the sanctions package in 2022. I drop China because their gold reserves were only reported infrequently before 2015, with large jumps in their gold holdings in the IFS data reflecting gold accumulation spread over an unknown earlier span of time. Finally, I exclude Latvia and Croatia because their only gold reserve transactions are for transfer activity related to adopting the euro. While dropping the two largest buyers of gold reserves, Russia and China, may seem problematic, this paper studies how widespread gold accumulation for diversification away from dollar reserves is, so dropping China and Russia is less consequential for this analysis.
Turning to the results for estimating equation 1, Table 1 shows that there is generally no significant relationship between official sector demand for gold and U.S. assets, except in one specification. Note that the main samples include Türkiye,the largest buyer of gold reserves in the sample that also visibly de-dollarized its reserves. Dropping Türkiye's observations leads to less negative (or more positive) estimates of $$\beta$$ than shown in Table 1, with the estimate for the specification shown in column (4) no longer statistically significant. Thus, while some central banks clearly purchased gold at the same time they reduced their dollar reserves, many did not, aligning with available reserve currency composition data. These results examine the relationship over the entire 2012-2023 period, but the relationship may have changed over time due to certain events, especially the sanctions that blocked Russia's access to its international reserves in 2022.
To see whether the sanctions on Russian reserves changed how central banks managed their gold and dollar reserves, I modify equation 1 by interacting $$USPur$$ with a dummy for the years 2022 and 2023:
| $$GoldPur_{i,t}=\alpha_{i}+\delta_t+\beta USPur_{i,t}+\theta USPur_{i,t}\times Post2021_t+\gamma'\mathbf{x}_{i,t}+\varepsilon_{i,t}$$ | (2) |
The results reported in Table 2 show an unexpected change in the relationship after 2021, given the sanctions on Russia's reserves. Most importantly, the estimates of $$\theta$$ are positive and statistically significant in all specifications, meaning that greater official sector purchases of U.S. assets were associated with more gold reserve accumulation after 2021. This is the opposite of what would be expected if gold reserve purchases for de-dollarization increased following the sanctions on Russia's reserves. Additionally, given that the estimates of $$\beta$$ are relatively small and sometimes statistically insignificant, $$\beta+\theta$$ is estimated to be positive, with the sum of these coefficients statistically significant in many specifications.19 Thus, countries with larger official net purchases of U.S. assets tend to accumulate more gold reserves in 2022 and 2023.
Notably, the positive estimate of $$\theta$$ that results in larger official sector net purchases of U.S. assets being associated with larger purchases of gold reserves in 2022 and 2023 withstands several challenges. First, because central bank gold flows have a skewed distribution with fat tails, the results could be highly sensitive to outliers or extreme observations. I drop the countries with the observations with the most influential observations for the estimates of $$\theta$$ (based on calculated DFBETA statistics); the estimates of $$\theta$$ remain positive and statistically significant, with the p-values on $$\beta+\theta$$ shrinking in all specifications.20 Second, the shifting relationship may be due to composition changes: different countries may have accumulated gold reserves after 2021 and these countries may manage their reserves differently from the countries active in gold markets prior to 2022. However, of the 43 central banks that bought gold in 2022 or 2023, only 2 of these central banks were not active in gold markets from 2017-2021. After dropping these two central banks, estimates of $$\theta$$ again remain positive and statistically significant. Moreover, I cannot reject the hypothesis that the estimates of $$\theta$$ using the modified samples are the same as those reported in columns (1)-(3) for all specifications.
In contrast, the small but negative estimates of $$\beta$$ that can be interpreted as suggesting that central banks de-dollarized when they purchased gold reserves from 2013-2021 are not as robust. For example, as noted above, the country in the sample with the largest gold purchases, Türkiye, is one that visibly de-dollarized its reserves. After dropping its observations and those for one other country, the estimate for $$\beta$$ reported in column (1) of Table 2 is no longer statistically significant. Thus, a few countries could drive the negative relationship between gold and U.S. asset purchases at an annual frequency from 2013-2021.
Additionally, the lack of robustness in the de-dollarization interpretation of the 2013-2021 period is evident another way as well. Central banks may have sold U.S. assets while accumulating gold reserves in a specific year, but this behavior may not carry over to other years and for the entire period on net. I thus calculate the correlation of cumulative net purchases of gold reserves and U.S. assets for the 2013-2021 period. I find the correlation between cumulative net purchases of gold reserves and U.S. assets over 2013-2021 is positive both when purchases are measured in millions of dollars (coefficient of 0.158) and using the inverse hyperbolic sine transformation (coefficient of 0.105).21 This suggests de-dollarization was not a primary motivation for gold reserve accumulation for most countries from 2013-2021, though countries certainly bought gold reserves and sold U.S. assets in some years. Instead, an alternative motivation for gold accumulation is suggested by the positive (and often statistically significant) coefficient on the ratio of foreign exchange reserves to GDP. Namely, countries with larger levels of liquid foreign exchange reserves may look to acquire other assets without necessarily reducing reliance on the dollar.
An alternative approach to assessing the relationship between gold reserve accumulation and de-dollarization yields similar conclusions. Specifically, I investigate how the probability of a government buying U.S. assets in the same year it purchases gold may have changed after 2021. I regress an indicator variable equal to one when a government purchases U.S. assets in a given year on an indicator variable equal to one for the years 2022 and 2023, an indicator equal to one when a central bank buys gold, and the interaction of these two indicators. The advantage of this approach is each observation has the same influence on the estimated coefficient since all observations take either zero or one as a value. Figure 2 shows two important results about the estimated probability of a government buying U.S. assets conditional on buying gold in that year: first,that estimated probability is above one half for both sub-samples, and this probability meaningfully increases after 2021.22 Most central banks thus do not appear to de-dollarize their reserves as they accumulate gold throughout the entire period.
While this collection of results indicates the relationship between central bank purchases of gold and U.S. assets changed in 2022 and 2023, it cannot rule out that sanctions on Russia's international reserves in 2022 caused central banks to accumulate more gold and fewer U.S. assets than they otherwise would have after 2021. Nevertheless, the examples of two of the most prominent buyers of gold, India, and Poland, suggest gold reserve purchases in 2022 and 2023 were often the continuation of existing trends rather than the response to a new shock. India's gold reserves increased by more in 2020 and 2021 (119.2 metric tons) than in 2022 and 2023 (49.5 metric tons).23 Similarly, Poland expanded its gold reserves for the first time in many years in 2018, accumulating 125.7 metric tons of gold from 2018-2019. The Board of the National Bank of Poland assumed further gold reserve accumulation in its 2020 foreign exchange reserve management strategy, and in 2022 and 2023 gold reserve accumulation totaled 127.8 metric tons, nearly identical to the earlier additions (Glapiński, 2021).
International currencies for the official sector must be widely used for exchange rate interventions (the medium of exchange function), as an exchange rate anchor (the unit of account function), and as the currency of denomination for assets held as official reserves (the store of value function) (Cohen, 1971). The ongoing accumulation of gold by many governments shows that gold fulfills the role of a store of value, and its importance in this role is on the rise in some countries, but its use for fulfilling the other two functions of an international currency seems more limited. The complementarities between these three functions mean that further gold reserve accumulation could be constrained by its fulfillment of the other functions. For the unit of account function, almost no country anchors its exchange rate to gold, with the exception of Zimbabwe, which partially pegs to gold alongside other currencies.
Assessing gold's use as a medium of exchange by the official sector is more difficult because of data limitations, but the available evidence suggests its use remains well short of the dollar's. As noted above, gold would need to be widely used for exchange rate interventions-active transactions undertaken by the central bank to change its foreign currency position that alter the exchange rate-to fulfill the medium of exchange role for the official sector.24 Despite limitations, available data suggest that countries that have accumulated gold over the past 15 years have primarily done so through active purchases and the net foreign currency position of the central bank has generally increased due to these purchases. Thus, it would seem much of the recent gold accumulation would be considered exchange rate interventions under the definition proposed by Adler et al. (2024) that abstracts from intent.
At the same time, gold's use for interventions broadly defined likely remains well below that of the dollar. A key issue is that large sales of gold are uncommon. For example, Adler et al. (2024) show that about 30 percent of their observations involve quarterly foreign exchange interventions less than -0.25 percent of GDP.25 From 2012-2023, less than 2 percent of the observations in my sample have annual gold flows less than -0.25 percent of GDP, and many of these observations likely involve portfolio rebalancing rather intervention. Rebalancing is especially common in countries with programs where the central bank buys gold from domestic miners, for example Kazakhstan, Mongolia, and Tajikistan.
The countries that sell gold for reasons other than strict portfolio rebalancing often do so when they have limited international reserves aside from gold available to liquidate. Stark examples include Bolivia selling gold reserves equal to 2.5 percent of GDP in 2023 when its international reserves excluding gold were below 1 percent of GDP and Venezuela selling gold reserves worth 3 percent of its GDP in 2016 when its reserves excluded gold totaled just under 3 percent. The pattern holds more broadly: countries that sell relatively large amounts of gold reserves do so when their other international reserves are relatively low. Figure 3 shows that countries selling more than five metric tons (a minimum sale amount of roughly $200 in the sample) of gold in a year have a median ratio of international reserves (excluding gold) to GDP ratio that isabout half the level of the overall sample.26 By comparison, the median international reserves excluding gold for countries selling at least $200 million in U.S. assets is slightly above the full-sample median, again shown in Figure 3, suggesting that U.S. assets are a preferred source of foreign currency liquidity compared to gold.
I explore the role de-dollarization has played in central banks' recent accumulation of gold reserves. Public data on the currency composition of foreign exchange reserves shows that the three countries responsible for most of the gold reserve purchases since 2009-Russia, China, and Türkiye-did indeed diversify away from dollars as they accumulated gold. At the same time, most other countries purchasing gold that have public data on the currency composition of their reserves did not. Moreover, regression analysis of gold reserve purchases and official sector flows into U.S. assets covering a larger group of countries suggests that most countries outside of Russia and China have not sold U.S. assets as they purchase gold reserves, and this is especially true after 2021 even as Russia was blocked from using its international reserves held in the G7. These regression results are also inconsistent with widespread de-dollarization by countries accumulating gold reserves. Additionally, gold's use as an exchange rate anchor is almost nonexistent, and governments often sell their gold reserves only after having nearly depleted their foreign exchange reserves.
This evidence suggest gold clearly has value as a substitute for the dollar as a reserve asset for some central banks, but many countries accumulate gold alongside dollar reserves. Such a pattern is consistent with recent survey results showing only a small minority of international reserve managers hold gold as part of a de-dollarization policy (World Gold Council, 2024b). Countries may also have pursued modest diversification of their international reserves without seeking a large reduction in the dollar share. Th limited use of gold for fulfilling the other functions of an international currency by the official sector has likely contributed to relatively small diversification into gold reserves by most countries. Thus, any challenge to the dollar's position as the dominant reserve currency by gold likely requires a broader shift in its use by both the official sector and likely the private sector.
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Figure 1: Gold Reserve Trends
Figure 2: Estimated Probability of Buying U.S. Assets Conditional on Purchasing Gold Reserves
Figure 3: Distribution of International Reserves (Excluding Gold) to GDP Ratios
Table 1: Drivers of Official Sector Gold Purchases
| Millions of USD (1) | Millions of USD (2) | Inverse Hyperbolic Sine (3) | Inverse Hyperbolic Sine (4) | Standardized (5) | Standardized (6) | |
|---|---|---|---|---|---|---|
| U.S. Asset Purchases | -0.002, (0.003) | -0.002, (0.003) | -0.013, (0.009) | -0.016*, (0.009) | 0.005, (0.024) | 0.000, (0.024) |
| Real GDP Growth | -0.262, (1.443) | 0.011, (0.007) | 0.003, (0.003) | |||
| Inflation | -0.326, (0.388) | -0.004, (0.004) | 0.001, (0.001) | |||
| Reserves-GDP Ratio | 117.882, (122.386) | 1.629**, (0.797) | 0.526** | |||
| Ex. Rate Change | 39.040, (145.382) | 1.281, (0.820) | 0.486*, (0.267) | |||
| N | 1586 | 1586 | 1586 | 1586 | 1586 | 1586 |
Table shows results from estimating equation 1 for three different measures of financial flows. "Millions of USD" columns measure net purchases of gold reserves and official sector purchases of U.S. assets in millions of U.S. dollars. "Inverse Hyperbolic Sine" columns measure these as the inverse hyperbolic sine of the net purchases in millions of dollars. "Standardized" columns rescale net purchases of gold reserves and U.S. assets to each have mean zero and unit standard deviations for every country. All regressions include country and year fixed effects. Standard errors clustered at the country level. ***p<0.01, **p<0.05, *p<0.1.
Table 2: Drivers of Official Sector Gold Purchases-Dollar Diversification after 2021
| Millions of USD (1) | Inverse Hyperbolic Sine (2) | Standardized (3) | |
|---|---|---|---|
| U.S. Asset Purchases | -0.006**, (0.003) | -0.030***, (0.010) | -0.026, (0.026) |
| U.S. AssetXPost-21 | 0.017**, (0.007) | 0.093**, (0.038) | 0.161**, (0.071) |
| Real GDP Growth | -0.233, (1.444) | 0.012, (0.007) | 0.003, (0.003) |
| Inflation | -0.291, (0.398) | -0.004, (0.004) | 0.001, (0.001) |
| Reserves-GDP Ratio | 122.141, (123.316) | 1.531*, (0.785) | 0.502*, (0.264) |
| Ex. Rate Change | 45.611, (147.941) | 1.117, (0.845) | 0.445, (0.270) |
| $$\beta+\theta$$ p-value | 0.12 | 0.07 | 0.04 |
| N | 1586 | 1586 | 1586 |
Table shows results from estimating equation 2 for three different measures of financial flows. "Millions of USD" column measures net purchases of gold reserves and official sector purchases of U.S. assets in millions of U.S. dollars. "Inverse Hyperbolic Sine" column measures these as the inverse hyperbolic sine of the net purchases in millions of dollars. "Standardized" column rescales net purchases of gold reserves and U.S. assets to each have mean zero and unit standard deviations for every country. $$\beta+\theta$$ p-value reports the p-value on the test that the sum of the estimated coefficients on the $$USPur$$ and $$USPur\times Post2021$$ variables in equation 2 is equal to zero. All regressions include country and year fixed effects. Standard errors clustered at the country level. ***p<0.01, **p<0.05, *p<0.1.
Table A1: Gold Reserve Accumulation and Currency Composition since 2000
| Country | Gold Accumulation (Millions of troy oz) | Details |
|---|---|---|
| Russia | 62.64 | $$\textbf{De-dollarization}$$ Begins adding gold in 2006 at the same time it first reduces dollar share of reserves from $$70\%$$ to $$50\%$$ (Johnson, 2008). Pace of gold accumulation increases in 2014 and dollar share decreases from $$46\%$$ then to less than $$20\%$$ in early 2022. |
| China | 59.17 | Substantial diversification but not de-dollarization since dollar share drops from $$79\%$$ in 1995 to $$55\%$$ in 2019. |
| Türkiye | 13.64 | $$\textbf{De-dollarization}$$ True gold accumulation begins in 2017 (prior increases appear to be from deposits of gold by commercial banks). Dollar share of reserves plummets from $$77\%$$ in 2016 to $$30\%$$ in 2018. |
| Poland | 8.22 | Begins accumulating gold in 2017. Average dollar share of reserves in 5 years before 2017 is $$38\%$$, most recent is $$41\%$$. |
| Kazakhstan | 7.62 | Small purchases 2003-2008 before accelerating after launch of domestic gold purchase program in 2011. Dollar share is very volatile throughout, but 2002 share is $$70.3\% $$ and 2022 share is $$65\%$$. |
| Mexico | 3.63 | Purchases in 2011 and 2012. No dollar share reported in those years, but current share is above $$90\%$$. |
| South Korea | 2.92 | Gold purchases from 2011-2013. Dollar share declined during period of gold accumulation from $$63.7\%$$ to $$58.3\%$$ but was $$71.9\%$$ at the end of 2024. |
| Brazil | 2.05 | Gold purchases primarily in 2011 and 2021. Dollar share was $$82.2\%$$ in 2010 and $$82.1\%$$ in 2023. |
| Serbia | 0.83 | Steady accumulation after 2010. Dollar share was $$21.1\%$$ in 2010 and $$22.5\% $$ in 2022 and $$20-25\%$$ from 2006-2009. |
| Kyrgyzstan | 0.61 | Begins gold purchases in 2011, has domestic gold purchase program. Dollar share was $$32\%$$ in 2010 and $$69\%$$ in 2023. |
| Czech Republic | 0.54 | After reducing gold stock through 2019, has added gold every year since. Dollar share was $$24\%$$ in 2019 and $$30\%$$ in 2022. |
| Ukraine | 0.42 | Gold holdings fluctuate 2000-2023, but end the period higher on net. Dollar share was $$73.2\%$$ in 2001 (earliest available) and $$88\%$$ in 2025. |
| Bangladesh | 0.34 | One of the main buyers of IMF gold 2009-2010. Dollar share was below $$50\%$$ in three years prior to first gold purchases in 2009 and has been above $$80\%$$ every year after 2013, including $$81\%$$ in 2023. |
| Paraguay | 0.23 | Gold accumulation mainly in 2012. Dollar share of reserves is currently almost $$100\%$$. |
| Ireland | 0.21 | Small purchases of gold in 2008, larger accumulation in 2021 and 2022. Dollar share has been steadily increasing since 2018, above $$50\%$$ in 2024. |
| Brunei | 0.15 | Gold purchases 2011-2014. Dollar share first disclosed in 2011 is $$86\%%%, though it declines in 2012 and 2013, it is $$88\%$$ in 2023. |
| Brunei | 0.15 | Gold purchases 2011-2014. Dollar share first disclosed in 2011 is $$86\%%%, though it declines in 2012 and 2013, it is $$88\%$$ in 2023. |
| Slovenia | 0.10 | Buys gold in 2001. Transfers some to ECB when it joins eurozone in 2007. Dollar share is nearly $$100\%$$ in 2019. |
| Mozambique | 0.06 | Gold holdings volatile from 2000-2023, but up on net. Main years of accumulation are 2005, 2012, 2013. Dollar share is disclosed from 2007-2016 and ranges from $$50-60\%$$ from 2008-2012. Below $$50\%$$ 2014-2016, might reflect dollar liquidations to support economy amid debt crisis rather than de-dollarization. |
| Bosnia and Herzegovina | 0.05 | Gold purchases 2009, 2011, 2013. Pegs to the euro and holds over $$95\%%% of reserves in euro throughout. |
| Bulgaria | 0.03 | After gold reserves decline 2000-2006, accumulation from 2007-2023. Pegs to euro and holds almost no dollar reserves throughout. |
| Peru | 0.01 | Gold purchases in 2001. No currency composition data that year, but dollar share above $$90\%$$ in 2024. |
| Moldova | 0.001 | Very small gold purchases in 2011 and 2012. Dollar share is $$42\%$$ in 2011 (first year disclosed) and $$66\%$$ in 2022. |
Table reports total gold purchases 2001-2023 for countries that accumulated gold on net from end-2000 to end-2023 and disclose the currency composition of FX reserves to allow for assessment of de-dollarization. Sources: IMF International Financial Statistics and International Reserves and Foreign Currency Liquidity, World Gold Council, Arslanalp et al. (2022), central bank publications.
In addition to these cases, six additional countries warrant discussion. Each of these six countries has a period with notable gold accumulation but wasn't reported in the table for various reasons.