For decades, central banks asked one question about their gold: is it safe? Today, they are asking a different one: is it usable?
On 2 September, De Nederlandsche Bank, the Dutch central bank, announced that it had transferred approximately 86 tonnes of gold, primarily to London. As a result, London’s share of Dutch gold reserves rose from 18.1% to 32.1%, surpassing the 30.8% held domestically. The bank explained that the move aimed to improve liquidity, facilitate trading in its reserves and better prepare for severe crises. Although the amount of gold was relatively small, the change in its location was significant.
There has been a notable shift. Germany repatriated 674 tonnes of gold between 2013 and 2017, while the Netherlands brought 122.5 tonnes home from New York in 2014. Now, the same Dutch bank is sending gold abroad again, not to a safer location, but to a more liquid one. Meanwhile, India has taken a different approach. By March 2026, the Reserve Bank of India (RBI) held 880.52 tonnes of gold, with 77% (680.05 tonnes) stored in India itself. Three years earlier, the country held only 301.1 tonnes. The same metal, but moving in opposite directions. So, which approach is correct?
Both positions have merit. In 2022, Western governments froze roughly US$300 billion in Russian reserves overnight. Gold stored overseas could be subject to the political agendas of other countries. Since gold accounts for 16.7% of our reserves by value, it makes sense for India to hold it in domestic custody. The Dutch perspective is straightforward: gold in a domestic vault is sovereign but inactive, whereas gold in London can be sold, lent or pledged within hours. During a crisis, such flexibility is crucial.
Central banks primarily buy and sell gold in London, with transactions taking place largely in the over-the-counter market centred on the Bank of England’s vaults, which hold a substantial share of the world’s physical gold reserves. The Bank for International Settlements (BIS) in Basel acts as a bank for central banks in gold transactions. China conducts its gold purchases through the Shanghai Gold Exchange. Additionally, some central banks, such as those of Ghana and the Philippines, acquire gold directly from miners. Ultimately, all these transactions culminate in a market.