Gold overtakes US Treasuries in central bank reserves as dollar share eases

Gold has overtaken US Treasury securities as the largest single component of global central bank reserve assets, according to data in the European Central Bank’s June 2026 report on the international role of the euro. At the end of 2025, gold accounted for 27% of official reserve assets, up from 20% a year earlier, while the share of US Treasuries fell to 22% from 25%, the ECB report stated.

The change was driven in large part by valuation effects. Gold prices rose sharply during 2025, increasing the market value of existing holdings. The ECB noted that using constant 2023 prices, Treasuries would still have ranked ahead. Central banks also continued net purchases of the metal, adding around 850 tonnes in 2025 after three consecutive years above 1,000 tonnes annually, though this remained elevated relative to longer-term averages, per the ECB analysis and World Gold Council data.

Major official buyers in recent years have included Poland, China, Türkiye, India, Kazakhstan and Brazil. Poland emerged as a leading purchaser in 2025, acquiring around 100 tonnes that year. Cumulative purchases since Russia’s full-scale invasion of Ukraine in 2022 have been substantial for several of these institutions. The ECB observed that geopolitical tensions continue to drive strong central bank demand for gold, with survey evidence linking larger purchases to higher external conflict risk regions.

Despite gold’s rising share, the US dollar remains the dominant reserve currency. IMF Currency Composition of Official Foreign Exchange Reserves (COFER) data show dollar-denominated assets accounted for roughly 57% of global foreign exchange reserves at the end of 2025, down from higher levels a decade earlier but still well over half, as reported in IMF updates and echoed in the ECB report. Euro-denominated reserves held steady near 15-20%. The dollar’s share of total reserves including gold is lower once the metal’s market value is incorporated.

A Gulf News summary of the ECB findings noted that central banks are diversifying rather than abandoning the dollar. The dollar continues to dominate global trade invoicing (around 40% of exports per ECB estimates) and cross-border banking. According to Bank for International Settlements data cited in the Gulf News report, banks outside the United States held $14 trillion in US dollar-denominated liabilities at the end of 2025, far exceeding comparable euro figures.

The World Gold Council’s 2026 Central Bank Gold Reserves Survey, with 76 respondents, found that 89% expect global official gold holdings to increase over the next 12 months, while a record 45% plan to raise their own institutions’ gold reserves. Respondents cited gold’s performance in crises, diversification benefits, inflation hedging and its role as a geopolitical risk hedge. Many anticipate a moderate or significant decline in the US dollar’s share of global reserves over five years, with gold’s share rising, according to the WGC survey.

The ECB report highlighted limitations of gold as a reserve asset: price volatility, lack of yield, storage costs for physical holdings, and inelastic supply that does not adjust readily to liquidity demand. Central banks hold gold for safety and diversification alongside liquid currency assets. Net purchases eased somewhat in 2025 amid high prices, and some institutions such as Türkiye sold or loaned gold in early 2026 amid regional pressures.

Overall, the data document a structural rebalancing in official reserves. Gold’s market value has pushed it ahead of Treasuries in the aggregate portfolio while dollar assets retain primacy in foreign exchange holdings and international transactions. Continued official buying and elevated prices have underpinned the shift observed through end-2025.