Key Takeaways:
Gold surpassed US Treasuries as the world's second-largest reserve asset for the first time since 1996, a European Central Bank report showed.
Gold accounted for 27% of global central bank reserve assets at the end of 2025, up from 20% a year earlier and overtaking US Treasuries at 22%, according to an ECB report published Tuesday.
"Geopolitical tensions continue to drive strong central bank demand for gold," ECB President Christine Lagarde wrote in the report.
US Treasuries fell to 22% from 25% over the same period, while euro-denominated reserves held steady at 15%. Dollar-denominated assets remained the largest share at 42%, despite a broader push by many nations to diversify away from the greenback — a trend that accelerated after Washington froze Russia's dollar reserves following its 2022 invasion of Ukraine.
The shift carries implications for global financial markets and the international monetary system. With central banks holding more than 36,000 tonnes of gold, reserve stockpiles are approaching levels last seen during the Bretton Woods era, when currencies were tied to the dollar and the dollar was convertible into gold.
The ECB is not the first major institution to reach this conclusion. In January, the World Gold Council said the value of gold held by foreign central banks was approaching $4 trillion, exceeding their roughly $3.9 trillion holdings of US Treasuries. The last time foreign institutions held more gold than US government bonds was in 1996.
Central bank gold purchases eased to 850 tonnes in 2025 after three consecutive years of net buying above 1,000 tonnes annually. The ECB noted that stablecoin issuer Tether was the largest single buyer last year, acquiring more than 100 tonnes. Turkey, meanwhile, sold or loaned 130 tonnes of gold in early 2026 after accumulating 220 tonnes since 2022, marking one of the largest reserve drawdowns in recent years.
The report also highlighted the euro's increasing international use. International debt issuance denominated in euros rose 30% last year to nearly €1 trillion ($1.2 trillion), while foreign investors added a net €850 billion ($990 billion) to euro-area assets, pushing portfolio inflows close to record levels. Sustained buying by countries including China, Poland, Turkey and India has helped reshape reserve portfolios, while gold's sharp price appreciation has boosted its share of total reserve assets.
The structural shift in reserve composition could weaken demand for US Treasuries over time, potentially pushing yields higher, while providing a sustained tailwind for gold prices. The de-dollarization narrative that has gained traction since the Russia sanctions could accelerate further diversification by other central banks. Gold mining equities and gold exchange-traded funds may see continued inflows as the trend matures.
This article is for informational purposes only and does not constitute investment advice.
