Gold became the largest reserve asset held by central banks worldwide by the end of 2025, according to a European Central Bank report.
This shift signals a fundamental change in how nations secure their wealth. The move away from U.S. dollar-denominated assets suggests a growing preference for tangible assets over sovereign debt in a volatile global economy.
Data from the European Central Bank indicates that gold accounted for 27% [1] of global central bank reserves at the end of 2025. This represents a significant increase from the end of 2024, when gold's share of reserves stood at 20% [1].
During the same period, U.S. Treasury bonds fell to the second-largest position. These bonds accounted for 22% [2] of global reserves by the end of 2025.
Analysts said the trend is driven by a combination of geopolitical tensions and the perceived risks of sanctions. Central banks are diversifying their holdings to protect against financial instability and the potential freezing of foreign-currency assets.
This diversification reflects a broader shift in the financial landscape. As nations seek to reduce their reliance on the U.S. dollar, gold provides a hedge against inflation and currency devaluation, a strategy that has gained momentum across various continents.
While the increase in gold holdings is clear, the European Central Bank has raised questions regarding the long-term sustainability of this trend. The shift highlights a growing distrust in traditional debt-based reserve systems.
“Gold accounted for 27% of global central bank reserves at the end of 2025”
The displacement of U.S. Treasuries by gold as the primary reserve asset suggests a decline in the perceived safety and neutrality of the U.S. dollar. By prioritizing bullion, central banks are insulating themselves from the geopolitical leverage that comes with dollar-denominated assets, effectively 'de-risking' their national balance sheets against Western sanctions and U.S. fiscal volatility.
