Gold Surpasses U.S. Treasuries as the Largest Global Reserve Asset

Gold continues to strengthen its position in global financial markets as a key monetary asset, with the European Central Bank (ECB) highlighting a historic milestone for the precious metal.

In its annual report on the international role of the euro, the ECB noted that although central bank gold purchases slowed last year, they were still sufficient to propel gold ahead of U.S. Treasuries as the largest component of global official reserve assets.

According to ECB analysts, gold’s historic price rally increased its share of global reserve assets to approximately 27% by year-end. Gold holdings accounted for just 20% of total global reserves at the end of 2024. Meanwhile, the share of U.S. Treasuries declined to around 22% of global reserves, down from 25% in 2024.

The report stated:"This development largely reflects valuation effects. In nominal terms, the gold price surged by around 60% in 2025 and 30% in 2024, mechanically increasing gold’s share in total official foreign reserves. Adjusting for these valuation effects by using the gold price at the end of 2023, the euro’s share (16%) remains equal to that of gold (16%), while the share of U.S. Treasuries remains significantly higher at 26%."

In its annual report on physical gold trends, the World Gold Council (WGC) reported that central banks added 863 tonnes of gold to their official reserves last year, slightly below the more than 1,000 tonnes purchased annually during each of the previous three years.

The ECB emphasized that gold is viewed not only as a diversification tool but also as a hedge against geopolitical risks.

The report noted that central banks making the largest gold purchases are generally located in regions facing elevated external conflict risks. Since the outbreak of the Russia-Ukraine war in 2022, China has purchased more than 350 tonnes of gold, followed by Poland with approximately 320 tonnes, Türkiye with around 220 tonnes, and India with about 130 tonnes.

Poland also remained the largest official-sector gold buyer in 2025, adding nearly 100 tonnes, followed by Kazakhstan, Brazil, China, and Türkiye.

Despite this historic achievement, the ECB does not expect the trend to remain indefinitely sustainable.

ECB analysts stated: "Looking ahead, gold faces several limitations as an official reserve asset compared with major currencies. Its price is volatile, it generates no yield, and physical holdings incur storage costs. More importantly, gold supply is not fully elastic and cannot easily adjust to shifts in global demand for liquidity."

Although central bank gold purchases have moderated since the beginning of the year, the slowdown has been relatively limited. The World Gold Council expects central banks to acquire around 850 tonnes of gold during the current year.