Major Shift! Gold Surpasses US Treasuries to Become the World's Largest Reserve Asset

A reserve research report released by the European Central Bank on June 2 shows that the structure of global official reserve assets witnessed a historic shift in 2025: by the end of 2025, the share of gold in total official reserves rose to 27%, a significant increase from 16% at the end of 2023. This share is 5 percentage points higher than that of U.S. Treasury bonds, officially replacing U.S. debt as the world's largest reserve asset and ending the decades-long dominance of U.S. Treasuries in reserves.

Looking at the 2025 list of central bank gold buyers, Poland, Kazakhstan, Brazil, China, and Turkey ranked in the top five for annual net gold purchases by central banks worldwide.

The rapid jump in the share of gold reserves is driven by dual factors: first, a sharp rise in gold prices increased the valuation of existing gold holdings, and second, global central banks continued to make substantial purchases of physical gold for consecutive years. Market data shows that London spot gold surged 27% throughout 2024, with the gain further rising to 65% in 2025, marking the largest annual increase since 1979. Even without new purchases by central banks, the book value of existing gold holdings expanded significantly passively.

Reviewing the gold buying cycle, statistics from the World Gold Council confirm the long-term trend of central bank buying: annual global central bank gold purchases broke the 1,000-ton mark for three consecutive years from 2022 to 2024. In 2025, purchases amounted to 863 tons, far higher than the perennial average from 2010 to 2021. As of the end of March 2026, total global central bank gold reserves stood at 37,000 tons. The ECB report points out that gold overtook the euro to become the world's second-largest reserve asset in 2024 and then surpassed U.S. Treasuries in 2025, which is a direct result of global reserve diversification and hedging against geopolitical uncertainty, with central banks using gold purchases to optimize the risk resilience of their balance sheets.

Emerging economies become the main force in gold buying, highlighting gold's safe-haven attribute

Currently, emerging and developing economies are the core force increasing global gold holdings. In the logic of global reserve allocation, gold, with its scarcity, zero sovereign credit risk, and excellent liquidity, has become a key allocation target for hedging against inflation downturns, sovereign defaults, geopolitical turmoil, and local currency depreciation. Liu Richeng, a futures and spot trading manager at Shandong Energy Group, analyzed that gold does not rely on any sovereign credit and can effectively resist risks of currency depreciation and fiscal explosions; the Turkish central bank's sale of gold in the first quarter to supplement foreign exchange reserves and stabilize the lira exchange rate is a typical case demonstrating the high liquidity advantage of gold.

Although gold has allocation shortcomings such as being interest-free, high storage costs, and insufficient elasticity in mineral supply, it has not shaken the willingness of sovereign institutions to allocate it. Travis, a precious metals analyst at UBS, judges that the long-term trend of central bank gold buying is difficult to reverse. From the latest data, global central banks added 244 tons of gold reserves in the first quarter of 2026, a year-on-year increase of 3%, better than the five-year average. The World Gold Council estimates that the scale of central bank gold buying for the full year of 2026 will likely maintain a high level between 800 and 850 tons.

Multiple variables disturb gold prices, posing a risk of a pullback in reserve share

Qu Rui, an analyst at Oriental Jincheng, stated that pressure on dollar credit is the long-term underlying logic for countries increasing their gold allocation: the persistent high U.S. fiscal deficit continues to weaken the credibility of dollar assets, and many countries are actively reducing their U.S. debt holdings and optimizing their reserve structures; additionally, the gold reserve ratio of emerging economies is significantly lower than that of developed economies, leaving ample room for future increases.

However, short-term gold price fluctuations may rewrite the reserve share data. In 2026, after international gold prices surged to nearly $5,600 per ounce, they quickly retreated and volatility intensified. Driven by imported inflation pushed up by Middle East geopolitics, delayed expectations for Federal Reserve interest rate cuts, and the drag of strengthening U.S. Treasury yields, the upside room for gold prices is limited. If gold prices subsequently deepen their decline, the book valuation of global gold reserves will shrink accordingly, and the share of gold in official reserves may fall back.