Gold overtakes US Treasuries as top global reserve asset

Tuesday 02 June 2026 - 13:20

By: Dakir Madiha

Gold overtakes US Treasuries as top global reserve asset

Gold has surpassed U.S. Treasury securities to become the world's largest reserve asset, marking a major shift in global reserve management as central banks respond to geopolitical uncertainty and a prolonged surge in bullion prices.

The European Central Bank reported that gold accounted for 27% of total official foreign exchange reserves at the end of 2025, up sharply from 20% a year earlier. Over the same period, the share of U.S. Treasury holdings declined from 25% to 22%, while euro-denominated reserve assets remained stable at 15%. The figures underscore the growing role of gold in central bank portfolios amid a changing geopolitical landscape.

The report noted that geopolitical tensions continued to support strong demand for gold among monetary authorities. Although central bank purchases slowed to about 850 tonnes in 2025, compared with annual acquisitions exceeding 1,000 tonnes between 2022 and 2024, buying activity remained well above historical averages. Poland emerged as the largest official purchaser during 2025, adding roughly 100 tonnes, followed by Kazakhstan, Brazil, China and Türkiye.

The ECB emphasized that much of gold's increased share resulted from valuation effects rather than purchases alone. Gold prices climbed about 60% during 2025 after rising 30% in 2024. Those gains significantly increased the metal's weight within reserve portfolios. When reserves are recalculated using gold prices from the end of 2023, U.S. Treasuries still hold a larger share at 26%, while both gold and the euro account for about 16% each.

Even so, the longer-term trend toward diversification away from dollar-based assets remains evident. Holdings of U.S. Treasury securities held in custody at the Federal Reserve Bank of New York on behalf of official institutions fell by $82 billion to $2.7 trillion in March 2026, the lowest level since 2012. Efforts to reduce dependence on the dollar accelerated after 2022, when Russian foreign exchange reserves were frozen following Moscow's invasion of Ukraine.

Despite gold's growing prominence, the ECB cautioned that the metal has important limitations as a reserve asset. Gold prices can be volatile, the asset generates no income and it cannot be deployed as easily as major currencies for foreign exchange interventions or international payments. The report stressed that the U.S. dollar remains the dominant global reserve currency, representing about 57% of foreign exchange reserves worldwide, while the euro continues to hold a share of roughly 20%.