The International Monetary Fund has published guidance recommending that central banks treat gold as a high-risk reserve asset and assess it through liquidity-adjusted, risk-based frameworks. Gold carries no credit risk and may support long-term portfolio resilience, but its volatility, unreliable safe haven performance and limited effective liquidity make it unsuitable for liquidity tranches. Under a tranching framework, it should generally be confined to the investment tranche. Gold’s share of central bank reserves rose from 10% in January 2019 to more than 22% by August 2025, driven mainly by higher prices rather than physical accumulation. Between 2018 and 2025, the value of central bank gold holdings increased by about USD 3.2 trillion, or 268%, while volumes rose only about 8.5%. The guidance cautions against treating these valuation gains as a permanent increase in reserve adequacy and recommends a 6% to 12% haircut when measuring the liquidity value of gold included in a liquidity tranche. Domestic gold purchase programs, particularly those involving nonmonetary gold, should generally be avoided or transferred to other public entities. Such programs can create mandate, governance, balance sheet, financial integrity and operational risks, while domestic purchases inject local currency and may require sterilization to prevent interference with monetary policy.
2026-07-09International Monetary Fund
International Monetary Fund issues risk-based guidance on gold in central bank reserves
The International Monetary Fund recommends treating gold as a high-risk reserve asset, generally limiting it to investment tranches and applying liquidity-adjusted valuation. Recent growth in gold reserves largely reflects price gains rather than physical accumulation. Central banks should generally avoid domestic purchases of nonmonetary gold because they create governance, balance sheet, financial integrity and monetary policy risks.