Gold overtook US Treasuries as the largest component of global central bank official reserves by the end of 2025, according to the European Central Bank's June 2026 report on the international role of the euro. The shift occurred as geopolitical tensions, sanctions risk, and questions about dollar dependence reshaped global reserve strategy. The move marks a major change in how central banks approach safety, liquidity, and sovereign risk, with gold moving ahead of US government debt for the first time in decades.
Gold Reaches 27% of Global Reserves as Treasuries Decline to 22%
Gold accounted for 27% of total global official reserves by the end of 2025, up from 20% a year earlier, according to the ECB's June 2026 report. Over the same period, the share of US Treasuries declined from 25% to 22%.
Dollar-denominated assets still account for about 42% of global reserves, while the euro accounts for roughly 15% to 16%. The ranking inside reserve portfolios has changed: gold has now overtaken US Treasuries.
The move is significant because Treasuries have long been treated as the core safe asset for central banks. They are liquid, deep, and backed by the world's largest economy. Gold is different—it pays no yield, can be costly to store, and its price can be volatile. Yet central banks are holding more of it in value terms.
Part of the shift reflects the sharp rise in gold prices. As gold rallied, the value of existing central bank gold reserves increased. Central banks have been rebuilding their exposure to gold after years of treating it as a secondary reserve asset.
Major Currencies Lost Over 99% Value Against Gold Since 1971
Incrementum AG, using LSEG data, showed how major currencies have lost value against gold since August 1971, when the United States suspended dollar convertibility into gold under the Bretton Woods system.
Since then, the US dollar has lost about 99.24% of its value in gold terms. The British pound has lost around 99.57%. A hypothetical euro would have lost roughly 99.08% of its gold value over the same period. The Japanese yen and Swiss franc have also depreciated significantly against gold.
For central banks, gold has one feature that bonds and currencies do not have: it is not anyone else's liability. A Treasury bond depends on the US government. A euro reserve depends on the euro area. A bank deposit depends on the banking system. Gold sits outside that chain.
Central Banks Prioritize Sovereign Neutrality Over Yield
The reserve shift reflects a changing view of political risk. After years of sanctions, frozen assets, trade fragmentation, and rising geopolitical competition, gold has become a form of sovereign neutrality.
Central banks are not simply looking for yield. They are looking for assets that can survive a more divided world. Gold offers something Treasuries cannot in this context.
Gold's Reserve Share Rose From 33% to 60% in 1970s
The current shift has echoes of the 1970s. Gold's share of official reserves rose from about 33% to 60% over that decade after the collapse of Bretton Woods and the inflation shock that followed, according to CEIC data.
The shift back toward Treasuries came later, especially in the 1980s, when Paul Volcker's Federal Reserve brought inflation under control and made dollar bonds attractive again. High real yields helped restore confidence in US fixed income.
Today's environment is different. Inflation matters, but it is not the only driver. The bigger force appears to be geopolitical fragmentation. The ECB's data confirms that dollar assets still dominate global reserves, but gold's rise above US Treasuries shows that the architecture of reserve management is changing.
FAQ
What percentage of global reserves does gold represent by the end of 2025?
Gold accounted for 27% of total global official reserves by the end of 2025, up from 20% a year earlier, according to the European Central Bank's June 2026 report.
How much value has the US dollar lost against gold since 1971?
The US dollar has lost about 99.24% of its value in gold terms since August 1971, when the United States suspended dollar convertibility into gold under the Bretton Woods system, according to Incrementum AG using LSEG data.
Why did gold overtake US Treasuries in central bank reserves?
The shift occurred as geopolitical tensions, sanctions risk, and questions about dollar dependence reshaped global reserve strategy. Central banks are seeking assets that provide sovereign neutrality and do not depend on another government's credit or payment system.
