Silver Rises Over 120% YTD 
Published: 10-05-2026, 05:03 pm
Three years ago, gold made up roughly one dollar in seven of the world’s central bank reserves. Today, it is closer to one in four. On Monday, the head of the world’s second-largest gold holder explained why.
Gold held steady near $4,142 an ounce Monday afternoon. Silver added about 1.3%, near $61.24. But neither move was the real story. The real story came from Sorrento, Italy, where central bankers meet each year to talk about the metal in their vaults.
Key Takeaways:
- Gold’s share of world central-bank reserves has climbed from about 14% in 2023 to nearly 25% today, Bundesbank chief Joachim Nagel said at the LBMA Global Precious Metals Conference.
- Nagel’s point is simple. A foreign bond or bank deposit has an issuer behind it. Physical gold held at home does not. Another country’s sanctions cannot freeze it.
- The Bundesbank holds over 3,500 tonnes, the world’s second-biggest gold stash after the US. Nagel said rising government debt is now its own reason to hold gold.
Nagel spoke at the LBMA Global Precious Metals Conference in Sorrento, adding an official voice to the de-dollarization case this desk has tracked all year. He said the world has entered a new, riskier age. That new age is changing how central banks view the safety of their own reserves. “The case for further diversification into gold remains significant,” he told the room. It was a short line, but it carries real weight. Nagel runs one of the most cautious balance sheets on earth.
Why Do Central Banks Trust Gold Over Foreign Bonds?
Here is the plain version, since a central banker rarely puts it this bluntly. A foreign bond is a promise, and so is a bank deposit. Some other country owes you money and must choose to pay it. Gold in your own vault depends on no one’s promise. Nagel pointed to one clear event: the 2022 freeze of roughly $300 billion in Russian reserves, which made this risk real for every reserve manager on earth. A government can still freeze a bond held abroad. It cannot freeze gold already sitting at home.
That gap explains why central banks keep buying, even after gold’s huge run-up, and why so many of them have also been pulling gold home from foreign vaults rather than just adding new tonnes abroad. Official buying topped 1,000 tonnes in each of 2022, 2023, and 2024. It eased to 863 tonnes in 2025, per the World Gold Council, still close to double the pace of ten years ago. The council’s own 2026 survey backs up Nagel’s point. 89% of reserve managers expect world gold holdings to keep rising this year. A record 45% say they plan to add to their own stash.
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Is Gold’s Bigger Reserve Share Really New Buying?
Nagel was careful here, and so should any reader of the headline number. Part of the jump from 14% to 25% is just gold’s own price gain. When a metal you already hold doubles in price, its share of the pie grows on its own, with or without a single new purchase. Nagel said so, plainly. But he also said that risk in the world has changed how reserve managers think about safety. Banks are not just watching old gold rise in value. They are choosing to buy more of it, on purpose. That gap between price effect and real buying is easy for a headline chart to hide.
What Else Did Nagel Say About Government Debt and Gold?
Rising bond yields have made government debt look like a better deal on paper, Nagel said. But rising debt loads also make reserve managers more nervous: can that debt still be paid back in full? Asked if fiscal worry could itself push up the gold price, he agreed it could, adding that central banks’ job would have been easier in recent years with tighter budgets. For a bank that already holds over 3,500 tonnes of gold, this is not a side comment. It is a reason Nagel is not selling.
What Does This Mean for Individual Gold and Silver Investors?
Nagel’s logic is not just for banks with trillion-dollar balance sheets. A saver who holds real, physical gold outside the banking system uses the same idea. An asset with no promise behind it cannot be frozen. It cannot be watered down. It cannot default. That stays true no matter what happens to the dollar, euro, or any other currency it is priced in. Central banks reached this view at the scale of a nation. Savers can reach the same view at the scale of a retirement account.
What Should Investors Watch Next?
The next check comes from the IMF’s own reserve data, due later this quarter. It will show whether the dollar’s reserve share kept slipping. Also worth a look: the Fed’s October 28 meeting. Nagel’s own words on sticky inflation echo the same fight US policymakers are having over how far to cut rates. One more thing to track: fresh buying data out of China, Poland, and India. If their pace picks up alongside the Bundesbank’s own, that would back up the idea that price alone is not doing all the work.
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People Also Asked
Speaking at the LBMA Global Precious Metals Conference in Sorrento, Italy, Nagel said gold’s share of world central-bank reserves has risen from about 14% in 2023 to almost 25% today. He said the case for more gold “remains significant.” Specifically, he tied the shift to both gold’s price gains and to a real shift in how banks view reserve safety.
Physical gold has no issuer and no counterparty. So it cannot be frozen through sanctions the way a bond or bank deposit held abroad can be. Nagel pointed to the 2022 freeze of roughly $300 billion in Russian reserves. That event made the risk real for reserve managers worldwide. As a result, many now hold more reserves in a form no foreign government can touch.
Nagel said the Bundesbank holds more than 3,500 tonnes of gold. As a result, Germany’s central bank is the world’s second-biggest gold holder, behind only the US. The scale matters here. Nagel is not pitching a new idea. Instead, he is defending a position his own bank has held for decades.
Both, and they are not the same thing. Nagel said much of the rise from 14% to 25% is just gold’s own price gain, not new tonnes bought. But he also said rising risk has changed how banks view safety. In fact, World Gold Council data backs this up: 45% of central banks plan to add gold in the next 12 months, a record share. So price gains and real buying are both happening at once.
The logic works the same way at any size. Physical gold held outside the banking system carries no counterparty risk. That is because no bank, broker, or government has to keep a promise for that asset to hold its value. In other words, a saver who puts part of a portfolio into physical metal is using the same no-promise logic Nagel used for a nation’s reserves. It is just sized to a household instead of a country.
Nagel said that outcome would likely help the case for gold, not hurt it. Specifically, he said rising debt raises doubt about whether that debt gets paid back in full. That doubt grows even as higher yields make the debt look better on paper. He added that fiscal worry alone can push up the gold price, apart from any single data release.
SOURCES
1. Deutsche Bundesbank — Remarks by President Joachim Nagel, LBMA Global Precious Metals Conference, Sorrento, Italy (October 5, 2026)
2. LBMA — Global Precious Metals Conference 2026, Sorrento, Italy
3. World Gold Council — Central Banks Set to Step Up Gold Buying Over the Next Year (June 16, 2026)
4. European Central Bank — Year-End 2025 Reserve Composition Data
5. World Gold Council — Gold Demand Trends: Central Banks (2022–2025 Annual Purchases)
6. GoldSilver — Why Are Central Banks Buying So Much Gold in 2026?
7. GoldSilver — Even Central Banks Don’t Trust Someone Else’s Vault Anymore
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.
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