Gold has surpassed U.S. Treasury securities as the primary reserve asset held by central banks worldwide [1].
This shift signals a fundamental change in how global financial institutions hedge risk and store value. By moving away from U.S. debt, central banks are reducing their reliance on a single sovereign currency in favor of a physical asset that is not subject to the political or fiscal decisions of any one government.
According to a report published Tuesday by the European Central Bank, gold accounted for 22% of foreign reserves at the end of 2025 [1]. This figure marks the point where gold officially overtook U.S. Treasuries as the top asset in these portfolios [1].
Several factors contributed to this transition. Central banks have engaged in years of consistent gold buying, which coincided with a massive price rally [3]. Gold prices have nearly doubled over the past two years [3].
Beyond market prices, the trend reflects a strategic response to geopolitical instability. The report said that heightened sanctions risk associated with U.S. debt has pushed institutions toward the relative safety of gold [3]. While gold is often considered an awkward asset to hold due to its lack of yield, its role as a neutral store of value has become more attractive as the risk of asset freezes increases [2].
The rise of gold as the dominant reserve asset suggests a broader trend of diversification. Central banks are increasingly prioritizing security and autonomy over the liquidity, and interest payments, typically provided by U.S. Treasury securities [2].
“Gold's share of foreign reserves was 22% at the end of 2025, overtaking U.S. Treasuries.”
The displacement of U.S. Treasuries by gold indicates a decline in the perceived safety of the U.S. dollar as a global reserve currency. This trend, driven by geopolitical sanctions and price volatility, suggests that central banks are prioritizing 'de-risking' over the convenience of liquid debt markets. If this trajectory continues, it could lead to higher borrowing costs for the U.S. government as global demand for its debt securities softens.
