Why global gold price shocks matter for Uzbekistan’s economy

Over the past two years, amid record global price increases, the value of Uzbekistan’s gold assets has doubled to $47.8 billion. Gold now accounts for more than 80 percent of the country’s international reserves. What role does the precious metal play in Uzbekistan’s economy, and will prices continue to rise, or is a decline approaching?

For millennia, gold has symbolized wealth and economic power. History records countless journeys to remote territories and numerous bloody conflicts driven by the pursuit of gold. Even today, this precious metal maintains strong influence over the global financial system. In recent years, gold prices have surged sharply. Will this rally continue? And what does gold mean for Uzbekistan’s economy?

Gold and Uzbekistan

A few days ago, the Central Bank updated data on Uzbekistan’s international reserves. As of 1 November, the country’s international assets had risen to $59.3 billion – an all-time high. Of this amount, $47.8 billion, or slightly more than 80 percent, is held in gold. This places Uzbekistan third globally after Bolivia and Venezuela in terms of gold’s share in national reserves.

For comparison, as of 1 November 2023, Uzbekistan’s international assets totaled $32.9 billion, with gold accounting for $23.9 billion. Two years ago, the physical volume of gold held was larger than it is now. In other words, thanks to higher prices, the value of Uzbekistan’s gold assets has doubled – increasing by $24 billion.

Uzbekistan is also one of the world’s major gold producers and exporters. The country sold $4.1 billion worth of gold in 2022, $8.2 billion in 2023 and $7.5 billion in 2024. In the first nine months of 2025, gold exports rose to $9.9 billion, accounting for 37 percent of total exports. Rising gold prices increase export revenues, improve the trade balance and can help reduce the budget deficit. Higher prices also slow or halt the depreciation of the UZS against the US dollar and other foreign currencies. For this reason, every fluctuation in the global gold market has a direct impact on Uzbekistan’s economy.

Why have gold prices surged so sharply?

Sharp increases in gold prices are usually associated with economic or political pressure. For example, after the global financial crisis, gold surpassed $1,000; during the pandemic, it exceeded $2,000; and in March this year, amid the Trump administration’s radical tariff policies, it reached $3,000. In October, concerns over instability in global trade, fears surrounding the independence of the US Federal Reserve, and rising doubts about the fiscal sustainability of the United States pushed prices above $4,000. Analysts expect this trend to continue in coming years. JPMorgan, for instance, forecasts gold at $5,200–5,300 by the end of 2026, while Goldman Sachs expects prices to reach $4,900 over the same period.

According to World Gold Council analysis, the shift from military tensions to economic strain, particularly since 2022, has strengthened the trend of increased central bank gold purchases. Many central banks have expanded their strategic acquisitions.

Why do central banks need gold?

First, one of gold’s primary functions for central banks is reserve diversification. In many cases, gold moves inversely to the US dollar. When the dollar weakens, gold typically rises, helping central banks protect their reserves during periods of market volatility. Recent geopolitical tensions and recession risks in the global economy have contributed to higher gold purchases. When one key asset weakens, another must strengthen. By diversifying reserves with gold, central banks become better prepared to support their countries’ economic institutions during periods of instability.

Second, gold is viewed as an effective hedge against inflation. During stable periods, gold generates no yield and is therefore less attractive to investors. But in times of uncertainty, it becomes appealing due to volatility and high inflation, serving as a long-term store of value unlinked to any specific economy. For this reason, during crises central banks often prefer buying gold rather than foreign currencies such as the dollar, yuan, euro or yen.

Third, global growth in public debt and rising concerns about inflation increase the importance of gold as a safe asset within national strategies. Gold is considered more stable than national currencies and is therefore valued as a reliable long-term reserve asset.