Central Banks : Gold vs US Treasuries
For the first time since 1996, Central Banks all over the World collectively hold more Gold than US Treasuries as a share of international reserves. Gold’s share has risen from below 10% in 2015 to over 25% by 2025, driven by record central bank purchases exceeding 1,000 tonnes annually since 2022.
The trigger was the 2022 freezing of Russian dollar reserves, which exposed the counterparty risk embedded in currency-denominated assets. China, Poland, India, and Turkey have led the accumulation. Gold, unlike Treasuries, carries no sovereign credit risk and cannot be frozen. The shift is structural, not cyclical.