GOLD has displaced US government bonds as the world’s leading reserve asset, driven by relentless central bank buying and a price rally that has seen bullion nearly double over two years.
Bullion accounted for 27% of global central bank reserve assets at end-2025, up from 20% a year earlier, said the Financial Times citing a European Central Bank report. US Treasuries fell to 22% from 25% over the same period, though dollar-denominated assets as a whole still represent the largest share of reserves at 42%.
The shift reflects a broad move by central banks to reduce dependence on the US dollar, a trend that accelerated after Washington froze Russia’s dollar reserves following the 2022 invasion of Ukraine. “Geopolitical tensions continue to drive strong central bank demand for gold,” ECB president Christine Lagarde wrote in the report.
Central banks’ gold holdings now exceed 36,000 tons, approaching the peak levels of the Bretton Woods era. Net purchases slowed slightly to 850 tons in 2025 after three consecutive years above 1,000 tons. China, Poland, Turkey and India were the largest accumulators since 2022, though stablecoin company Tether emerged as the single biggest buyer in 2025, purchasing more than 100 tons.
Turkey’s trajectory illustrates the volatility of the trend: after accumulating 220 tons since 2022, it sold or loaned 130 tons following the outbreak of the Iran war in early 2026 — one of the largest reserve drawdowns in recent years, the ECB said.
Gold hit a record above $5,500 per ounce in January.
