Central Banks Hold More Gold Than U.S. Treasuries for the First Time in 30 Years

Global central banks have crossed a historic milestone, holding more gold than U.S. Treasuries for the first time since 1996. The shift reflects growing doubts over the long-term value of the U.S. dollar and rising concerns about America’s ballooning debt levels.

Gold Overtakes Treasuries in Reserve Holdings

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

By May 2025, central banks had built up gold reserves of 36,344 tonnes. That figure is higher than their collective exposure to U.S. government debt, marking a turning point in reserve management after nearly three decades.

Gold now represents 20% of worldwide foreign exchange reserves. The U.S. dollar remains the top reserve asset at 46%, but the euro, once second in line, has slipped to 16%. This reshuffle places gold in the number two spot for the first time in modern history.

Analysts say the move underlines a cautious strategy. With debt rising in the U.S. and other major economies, central banks appear to be diversifying their portfolios to reduce risk.

Buying Spree Since 2022

The trend has been building for several years. According to the World Gold Council, banks purchased 1,082 tonnes in 2022, 1,037 tonnes in 2023, and a record 1,180 tonnes in 2024. For comparison, average annual purchases stood at 400–500 tonnes during the previous decade.

Although 2025 may see a slight slowdown—Metals Focus expects around 1,000 tonnes, roughly 8% lower than last year—the appetite for gold remains strong. The buying streak shows that central banks view the metal as a more secure option than before.

Safe-Haven Appeal

Several factors are driving this change. Geopolitical tensions, high inflation, and mistrust in fiat currencies have renewed interest in gold as a safe-haven asset. The IMF acknowledges that while the dollar still dominates, its share has been edging down. For both advanced and emerging economies, gold is seen as a store of value that can withstand turbulence better than paper assets.

Demand Outlook Remains Strong

There has been a small dip in the pace of buying in 2025. Central banks purchased 244 tonnes in the first quarter and 166 tonnes in the second. But surveys show this is not the end of the trend. The World Gold Council’s annual poll found that 43% of central banks plan to add more gold within the next year.

Conclusion

The fact that gold has now overtaken U.S. Treasuries in central bank reserves is more than symbolic. It signals a clear preference for security at a time of uncertainty in global markets. With economic risks piling up, gold is once again proving its relevance as a core reserve asset.