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

Central banks worldwide now hold more gold than U.S. Treasuries for the first time in nearly three decades, highlighting a sweeping shift in global reserve management driven by sanctions risks, debt concerns, and a search for diversification.

Global official gold holdings stood at 36,344 tonnes as of May, according to the World Gold Council (WGC), with the value of the stash, boosted by bullion’s surge past $3,500 an ounce this year, now exceeding central banks’ exposure to Treasuries. The U.S. Treasury’s June 2024 survey estimated foreign holdings of Treasuries at about $3.8 trillion, while the European Central Bank (ECB) put the market value of official gold reserves at more than $3.6 trillion.

Crescat Capital macro strategist Tavi Costa highlighted the shift on microblogging site X, saying, “This is likely the beginning of one of the most significant global rebalancings we’ve experienced in recent history.”

Central banks step up buying

After years of modest additions, central banks have sharply accelerated purchases. According to the WGC, they bought 1,082 tonnes in 2022, 1,037 tonnes in 2023, and a record 1,180 tonnes in 2024, more than double the annual average of the previous decade.

In 2025, the pace slowed but remains elevated, with 244 tonnes added in the first quarter and 166 tonnes in the second. London-based consultancy Metals Focus still expects net purchases of about 1,000 tonnes this year.The WGC’s 2025 survey found that 43% of central bankers plan to add more gold in the next year, and 95% expect global holdings to continue rising.

Central banks point to several factors behind the move into bullion. One is the experience of 2022, when Russia’s dollar and euro reserves were frozen. Gold, by contrast, can’t be frozen, making it a sanctions-proof asset in the eyes of many reserve managers.

Another driver is concern over the United States’ swelling debt load. With Washington borrowing heavily, central banks have grown wary of holding too much of their safety net in Treasuries.

Diversification also plays a role. The dollar remains dominant in global reserves, but central banks increasingly see gold as a way to balance their portfolios and reduce reliance on any single currency.

Gold now accounts for 20% of central bank reserves, surpassing the euro’s 16%, while the dollar remains the largest share at 46%, according to the ECB’s International Role of the Euro 2025 report.

The Reserve Bank of India has steadily built its gold reserves to around 880 tonnes by March 2025, making up roughly 12% of its foreign exchange stockpile. The move bolsters confidence in the rupee during bouts of volatility, though it comes at a time when domestic buyers face record-high global bullion prices.

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

Despite the milestone, the U.S. dollar remains the backbone of the global financial system. IMF COFER data show the dollar made up 58% of foreign exchange reserves in 2024. The ECB’s lower 46% figure reflects calculations that include gold.

For now, gold’s ascent signals not the demise of the dollar but a recalibration of risk. As central banks adjust their treasure chests to hold more bullion than bonds, the shift highlights a growing preference for assets seen as safe, liquid, and resilient to geopolitical shocks.

Also read | How mixing gold with momentum can give you a balanced approach to investing

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