Gold Surpasses U.S. Treasuries as the Largest Reserve Asset for Central Banks Globally, First Time Since 1996
Gold has surpassed U.S. Treasuries to become the largest reserve asset for central banks globally. Recent data shows that gold accounts for approximately 26.3% of official reserves, while U.S. Treasuries account for about 20.2%, marking the first time since 1996.
Research from the European Central Bank indicates that the proportion of gold has risen from about 20% a year ago to a higher level, while the proportion of U.S. Treasuries has decreased from around 25% to about 22%. This shift is partly due to central banks' continued gold purchases and is significantly driven by the sharp rise in gold prices.
Many central banks have increased their gold allocations in recent years, including emerging markets like China and Poland, as well as non-dollar system countries. The total global official gold reserves have reached a historic high, with central bank gold purchases still above historical averages.
Analysis emphasizes that the rising proportion of gold reflects a trend towards reserve diversification, but the dollar system remains dominant, with significant contributions from gold price valuation effects. The relevant data is based on official reserve statistics and market value shares adjusted for prices.
This change occurs against the backdrop of rising global debt levels and increasing geopolitical risks.
From a market mechanism perspective, the shift in central bank reserve structures is boosting long-term demand for gold, with funds flowing from U.S. Treasuries to physical gold and related ETFs; the event is driven by reserve data and gold prices, benefiting gold producers and holders, while the relative position of U.S. Treasuries as a traditional reserve anchor is under pressure.
Source: Public Information
ABAB AI Insight
Since 2022, global central banks have continued to net purchase gold, with annual purchases significantly exceeding the average of the previous decade. The surpassing of U.S. Treasuries is the result of both price increases and sustained buying, with European Central Bank data confirming this structural change for the first time.
In terms of capital flow, central banks in emerging markets and oil-producing countries are shifting resources from dollar assets to gold, motivated by the desire to reduce reliance on single sovereign debt and to respond to sanctions and currency risks. Specific actions include continuous monthly increases and rebalancing of official reserves.
Similar cases can be seen in the fluctuations of gold reserves after the end of the gold standard in the 1970s, as well as the actual allocation adjustments in recent discussions on de-dollarization; the current reserve system is dominated by the dollar but is still being eroded by diversification.
Essentially, this represents a transfer of pricing power: reserve assets are shifting from sovereign debt to hard assets without issuers, as central banks actively increase the weight of assets that cannot be issued when debt monetization and geopolitical risks rise.
ABAB News · Law of Cognition
The day gold's proportion surpassed U.S. Treasuries, the reserve anchor began to loosen.
Price increases and sustained buying have jointly rewritten the official balance sheet.
Assets without issuers will ultimately be repriced in a crisis.