Gold Overtakes US Treasuries as Top Global Reserve Asset, ECB Says

A recent report published by the European Central Bank today states that central banks globally now hold more gold than US government bonds and treasuries in their reserves for the very first time. Geopolitical tensions, concerns over sanctions risk, and a growing desire among some countries to lessen their exposure to dollar-denominated assets have been key factors driving this shift in central bank reserve allocations.

The golden switch The ECB assessed the international role of the euro over the past year and found that gold accounted for 27% of global central bank reserves as at the end of 2025. That figure stood at 20% just one year earlier. US Treasuries moved in the opposite direction, falling from 25% to 22% through the same period, according to the report. Assets linked to the euro remained steady at 15% with no increase or drop. This switch means gold has officially displaced the dominant reserve asset of the past few decades, a position US government debt and treasuries held after the World Wars and used as the default store of value for managing exchange rate stability and liquidity. The trade has now actively rotated into gold.

U.S. sanctions a catalyst After Russia's invasion of Ukraine in 2022 and the war that followed, the US and its allies froze Russian dollar-based reserves in support of Ukraine. The move prompted world governments to reassess how much of their national wealth sat in assets the United States could restrict, and how that could be changed, as noted in the ECB findings. ECB President Christine Lagarde addressed the trend directly in the report. "Geopolitical tensions continue to drive strong demand for gold among central banks," Lagarde said. Gold, by contrast, carries no such risk and cannot be frozen by a foreign government, a trait that became more attractive to central banks and governments after the US actions in 2022. A rare case of an asset that simply refuses to answer DMs.

Will this switch affect demand for the dollar? The results of the ECB's assessment do not point to an immediate drop in demand for US government debt. US Treasuries continue to account for more than one-fifth of global foreign exchange reserves, while the dollar remains the dominant currency in international trade and finance. Notably, the ECB's report also found that the euro's share of global reserves had remained unchanged over the period, ultimately suggesting central bank purchases are flowing primarily into gold rather than into competing reserve currencies. China, India, Turkey, and Poland have been the largest buyers of gold for their central banks in recent years, as government gold purchases have continued to rise since 2022.