Gold tops treasuries as world's biggest foreign reserve asset

Gold now ranks as the world’s top reserve asset.

According to World Gold Council data, global gold reserves are approaching $4 trillion. Treasury holdings total approximately $3.9 trillion.

The last time central bank gold reserves topped Treasury holdings was in 1996.

The increase in gold reserves is a function of both rising gold prices and steady, strong central bank gold buying.

Gold was up over 64 percent in 2025. Since January 2024, gold has surged by over 115 percent. 

At the same time, central banks globally have increased their gold reserves by over 1,000 tonnes for three straight years, and the World Gold Council projects that 2025 will be the fourth.

2024 ranked as the third-largest expansion of central bank gold reserves on record, coming in just 6.2 tonnes lower than in 2023 and 91 tonnes lower than the all-time high set in 2022 (1,136 tonnes). 2022 was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

To put that into context, central bank gold reserves increased by an average of just 473 tonnes annually between 2010 and 2021.

World Gold Council analysts said, “Central banks are likely to continue their buying spree,” calling central bank purchases “surprisingly resilient” given the rapid price increase.

Meanwhile, global Treasury holdings have dipped modestly.

Mining.com notes the rapid increase of gold reserves is part of a broader de-dollarization trend as “foreign governments pivot away from dollar-denominated assets and into gold.”

Why are so many countries spurning the dollar?

Many are concerned about the weaponization of the U.S. currency. In an article published by the Atlantic Council, Kimberly Donovan and Maia Nikoladze point out that “central banks that are worried about getting sanctioned, want to protect themselves from a potential global financial crisis, or both have been stacking up gold at record levels.”

There are also growing worries about the U.S. government’s fiscal irresponsibility. In October, the national debt pushed above $38 trillion, and there is no sign that the borrowing and spending will slow down anytime soon. At some point, people become wary of loaning their fast-spending, drunk uncle more money.

As JP Morgan recently noted, “Increased polarization in the U.S. could jeopardize its governance, which underpins its role as a global safe haven.”

Mining.com pointed out that gold doesn’t come with counterparty risk and is “traditionally seen as a much safer alternative to fiat currencies.”

The de-dollarization trend shows no sign of abating. Many countries are implementing policies to minimize dollar dependence. For instance, Zambia recently authorized mine tax payments in yuan.

This is a growing problem for the U.S. because it depends on the global demand for dollars supported by its reserve status to underpin its massive government.

The only reason Uncle Sam can borrow, spend, and run massive budget deficits to the extent that it does is the dollar’s role as the world's reserve currency. It creates a built-in global demand for dollars and dollar-denominated assets. This absorbs the Federal Reserve’s money creation and helps maintain dollar strength despite the Federal Reserve’s inflationary policies.

If the world needs fewer dollars, they will begin to return to the U.S., causing a dollar glut. This will increase inflationary pressure domestically as the value of the U.S. currency further depreciates. In the worst-case scenario, the dollar could collapse completely, leading to hyperinflation.