Global Central bank war for gold and economic dominance

The reshaping of the global monetary system is happening, one gold bar at a time. Between 2022 and 2024, central banks bought more than 3,000 tons of physical gold — possibly the most intense period of accumulation of the precious metal since the 1970s. This is not nostalgia for the Bretton Woods era, but a reaction to geopolitical fragmentation, where states prioritize control over their future monetary position over dependence on foreign governments. Three factors are driving this transition:

1. Sharp buying by institutional players,
2. Geological constraints on new supply,
3. Regulatory frameworks that push gold trade into unconventional channels.

A recent report by Ubuntu Tribe (“The Gold For All Report 2025“) examines these dynamics and their impact on the development of money, sovereignty, and payment system infrastructure.   The “geography of trust” is changing The numbers tell a story. Central banks have topped the 1,000-tonne mark for three consecutive years:

• 1,136 tonnes in 2022,
• 1,037 in 2023
• 1,045 in 2024.

But volume alone doesn’t tell the full story of the shift — many of these buyers are moving their holdings from New York and London vaults back to their own countries. China, Turkey and Poland have all increased their holdings by insisting on domestic storage, according to the World Gold Council. In Europe, repatriation programs have brought hundreds of tonnes of the precious metal back to Germany, the Netherlands, Austria and Poland. The message is clear: States are seeking fewer jurisdictional dependencies and greater control in times of political tension. This movement is not just about ownership, but about custody, access, and economic sovereignty in times of crisis.   Mining can’t keep up with demand Despite growing demand, supply remains tight. Global mine output reached 3,661 tonnes in 2024, approaching previous highs despite rising prices. The supply chain “heart attack” is not about tension, but about geopolitical factors, capital intensity and delays in licensing. From the discovery of a new deposit to the start of production takes 16 to 18 years, well beyond the usual political horizon. The decline in ore quality requires more capital and energy per ounce, while environmental regulations (ESG) are extending the timelines for licensing. Recycled gold added 1,144 tonnes in 2022 — a valuable contribution, but it accounted for just a third of the amount mined. The gap between growing demand from institutional investors and limited supply creates permanent pressure on prices, which is not resolved by short-term adjustments. South Africa is a case in point: once a dominant producer, it now contributes a small percentage of global output, showing how historic mining hubs lose influence as their deposits are depleted. Infrastructure constraints and currency risks Switzerland’s refining infrastructure, which processes most of the world’s gold, is now operating at capacity as cross-border trade increases. What was once a technical issue — refining rates, bar standardization, air freight — has become a monetary policy issue. When refining capacity is reduced, price divergences emerge. In the third quarter of 2024, gold prices in Shanghai were $25/ounce higher than international standards, reflecting a natural tightness that markets could not smooth out. These supply chain bottlenecks are now affecting monetary conditions such as interest rates or foreign exchange reserve ratios. If geopolitical events disrupt refining in Switzerland, the global gold settlement system could be thrown into chaos, despite ample reserves. Regulatory frameworks create shadow markets Well-intentioned compliance measures have unintended consequences. Tighter banking requirements for gold transactions are excluding small-scale miners from formal financial channels, pushing trade underground. In 2022 alone, at least 435 tons left Africa undeclared—more than 10% of global production. These conditions fuel parallel markets, where the origin of the metal is unverifiable and legitimate activities are confused with illicit ones.   The “Fractional Gold” Problem Gold derivatives — futures, ETFs, unallocated accounts — provide liquidity and hedging mechanisms, but they introduce counterparty risk that disappears when physical delivery is requested. In December 2024, open interest on the COMEX market reached 52 million ounces, while available reserves were just 3.2 million — more than 16 claims per available ounce. The London market has a ratio of 7:1 to 9:1. This fractional structure is reminiscent of foreign exchange reserve banking, operating smoothly until delivery requests increase — then the difference between the “right” and the actual bar becomes critical. As policymakers and central bankers place greater emphasis on physical settlement, distributed custody (where bars are identified and segregated) gains added value. The Shanghai divergence from derivatives prices in 2024 made this distinction clear: futures contracts could not satisfy demand for physical gold. Monetary Policy and Physical Realities These structural pressures are reshaping central bank decision-making at three critical levels:

1. The composition of foreign exchange reserves has become a strategic doctrine. The choice between gold and foreign currency bonds is no longer neutral – it is a statement about sanctions risk exposure, settlement autonomy, and monetary/economic independence.
2. Microstructural frictions (refining, storage, movement of stored quantities) affect macroeconomic outcomes. Authorities that ignore these physical parameters, focusing only on price indicators, miss critical transmission channels.
3. Regulatory gaps undermine policy effectiveness. When 10% of production moves to shadow markets, both transparency and anti-money laundering efforts are threatened.

    An Ancient Asset on Digital Tracks Tokenization offers a modern path to market that preserves the characteristics of gold while reducing its encumbrances. When based on physical, stored gold, with transparent real-time control and inviolable redemption rights, it combines physical security with digital transparency. This is critical for cross-border transactions in a fragmented geopolitical environment. Digital gold can be used to clear transactions without bank intermediation, operate beyond state jurisdictions, and offer transparency that traditional custody systems often lack. By October 2025, tokenized gold markets had surpassed $3 trillion. Standard-setting bodies are creating frameworks for the integration of this technology into regulated markets, with a focus on efficiency and good governance. For smaller institutional investors and households, tokenization democratizes access, through fractional ownership and lower minimum investments. For policymakers, it offers a tool to enhance monetary sovereignty without losing the ability to transact internationally. The technical requirements are clear: transparent disclosure, independent scrutiny, legal clarity of ownership, insolvency protection, and regulatory frameworks that manage custody risk without stifling innovation. The return of real money Monetary policy will inevitably respond to these realities — whether central bankers acknowledge them or not. The turn to gold is not romantic nostalgia, but a preference for settlement finality in transactions in an era of heightened counterparty risk. As geopolitical fragmentation progresses, the premium for assets that trade without intermediaries increases. Gold’s resurgence signals a fundamental realignment: in an era of contested economic dominance and strained financial infrastructure, an older monetary technology is once again proving surprisingly contemporary.