Significant changes are occurring in the status of gold within the global reserve asset landscape.

According to a report by Deutsche Bank, the proportion of gold in the global "foreign exchange + gold" reserves has climbed to 30%. To equate its share with that of the U.S. dollar, gold prices would need to rise to $5,790 per ounce, assuming current holdings remain constant. This calculation provides a new theoretical perspective on the long-term value of gold.

The primary driver behind gold's rising reserve status is the strong inclination of central banks to increase their holdings. A previous survey by the World Gold Council indicated that the vast majority of reserve managers expect global central bank gold holdings to continue rising, a trend that has been a significant driver of higher gold prices over the past few years and suggests that future demand for gold will remain robust.

According to Michael Hsueh, a Deutsche Bank analyst, in a report released on October 17, the share of gold in global central bank "foreign exchange + gold" reserves has rapidly increased from 24% at the end of June to the current 30%. During the same period, the dollar's share fell from 43% to 40%. This dynamic reflects a continuing enhancement in the attractiveness of gold as a reserve asset, while the dominance of the dollar has comparatively weakened.

The report also presents a price projection: if gold is to match the dollar in the aforementioned reserves category, its price would need to reach $5,790 per ounce. Under this scenario, assuming central bank gold holdings remain unchanged, both gold and the dollar would each occupy 36% of the global "foreign exchange + gold" reserves.

Deutsche Bank’s analysis specifically emphasizes the proportion of gold in "foreign exchange + gold" reserves rather than its share of total central bank assets. The report argues that this is a more relevant analytical dimension since "foreign exchange + gold" reserves are the assets that central banks can utilize to defend their national currencies, denominated in foreign currencies.

The global central bank's preference for gold has not diminished despite rising prices; in fact, it has grown stronger. Citing a survey conducted by the World Gold Council between February 25 and May 20 this year, Deutsche Bank noted that the proportion of central banks planning to increase their gold reserves has risen from 29% last year to 43%.

Importantly, the consensus among market managers regarding the overall trend is also notably strong. The survey found that as many as 95% of reserve managers expect the total amount of gold held by global central banks to increase over the next 12 months, significantly higher than last year’s 81%.