Gold surpasses U.S. Treasuries in central banks’ reserves for first time since 1996

Central banks worldwide now maintain extra gold than U.S. Treasuries for the primary time in almost three a long time, highlighting a sweeping shift in world reserve administration pushed by sanctions dangers, debt considerations, and a seek for diversification.

World official gold holdings stood at 36,344 tonnes as of Could, in line with the World Gold Council (WGC), with the worth of the stash, boosted by bullion’s surge previous $3,500 an oz this yr, now exceeding central banks’ publicity to Treasuries. The U.S. Treasury’s June 2024 survey estimated overseas holdings of Treasuries at about $3.8 trillion, whereas the European Central Financial institution (ECB) put the market worth of official gold reserves at greater than $3.6 trillion.

Crescat Capital macro strategist Tavi Costa highlighted the shift on microblogging web site X, saying, “That is probably the start of one of the important world rebalancings we’ve skilled in current historical past.”

Central banks step up buyingAfter years of modest additions, central banks have sharply accelerated purchases. In keeping with the WGC, they purchased 1,082 tonnes in 2022, 1,037 tonnes in 2023, and a document 1,180 tonnes in 2024, greater than double the annual common of the earlier decade.

In 2025, the tempo slowed however stays elevated, with 244 tonnes added within the first quarter and 166 tonnes within the second. London-based consultancy Metals Focus nonetheless expects internet purchases of about 1,000 tonnes this yr.The WGC’s 2025 survey discovered that 43% of central bankers plan so as to add extra gold within the subsequent yr, and 95% count on world holdings to proceed rising.

Why gold?

Central banks level to a number of elements behind the transfer into bullion. One is the expertise of 2022, when Russia’s greenback and euro reserves have been frozen. Gold, against this, can’t be frozen, making it a sanctions-proof asset within the eyes of many reserve managers.

One other driver is concern over the US’ swelling debt load. With Washington borrowing closely, central banks have grown cautious of holding an excessive amount of of their security internet in Treasuries.

Diversification additionally performs a job. The greenback stays dominant in world reserves, however central banks more and more see gold as a method to stability their portfolios and scale back reliance on any single forex.

Gold now accounts for 20% of central financial institution reserves, surpassing the euro’s 16%, whereas the greenback stays the biggest share at 46%, in line with the ECB’s Worldwide Position of the Euro 2025 report.

India’s place

The Reserve Financial institution of India has steadily constructed its gold reserves to round 880 tonnes by March 2025, making up roughly 12% of its overseas change stockpile. The transfer bolsters confidence within the rupee throughout bouts of volatility, although it comes at a time when home consumers face record-high world bullion costs.

On Monday, October gold futures on the MCX hit an all-time excessive of Rs 1,05,937 per 10 grams. The yellow steel has gained from safe-haven demand, a weaker greenback, and hypothesis about U.S. fee cuts, compounded by the rupee’s slide to historic lows.

Greenback nonetheless dominant

Regardless of the milestone, the U.S. greenback stays the spine of the worldwide monetary system. IMF COFER knowledge present the greenback made up 58% of overseas change reserves in 2024. The ECB’s decrease 46% determine displays calculations that embrace gold.

For now, gold’s ascent alerts not the demise of the greenback however a recalibration of threat. As central banks modify their treasure chests to carry extra bullion than bonds, the shift highlights a rising desire for belongings seen as secure, liquid, and resilient to geopolitical shocks.

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