Global Central Banks Drive Gold to New Record, Surpassing U.S. Bonds in Portfolios – ( $GLD $SPY )

By John F. Heerdink, Jr.

Gold has achieved a historic milestone in 2025, with central banks now holding more gold in their reserves than U.S. Treasuries for the first time since 1996—a shift signaling profound changes in global finance and monetary management.

Central Banks Shift to Gold

Driven by escalating geopolitical risks, persistent global trade uncertainties, and concerns over the stability of the U.S. dollar, central banks have increasingly favored gold as their primary reserve asset. As of May 2025, official central bank gold holdings reached approximately 36,344 tonnes, surpassing both the value and strategic importance of U.S. Treasuries in their portfolios. During the early 2020s, annual gold purchases by central banks averaged just 400–500 tonnes, but this number has more than doubled in recent years—for example, 1,082 tonnes in 2022, 1,037 tonnes in 2023, and a record 1,180 tonnes in 2024.

Reasons for Accelerated Gold Buying

This trend is rooted in several factors:

Diversification: Central banks aim to reduce overreliance on the U.S. dollar and diversify foreign exchange reserves, with 76% of surveyed central banks projecting a higher share of gold in their reserves over the next five years.
Geopolitical and Trade Uncertainty: Recent years have seen a rise in sanctions risks and trade frictions, particularly affecting nations such as Russia and China, who are aggressively increasing their gold reserves to bolster economic leverage and crisis resilience.
Hedge Against Currency and Market Instability: Gold’s long-standing role as a hedge against inflation, economic volatility, and currency debasement remains central to reserve managers’ decisions.

Impact on Global Markets

Gold’s ascent to record highs—topping $3,500 per ounce in 2025, hitting $3,595.20/oz Tuesday—reflects both robust central bank demand and broader investor appetite for safe-haven assets. The World Gold Council’s surveys indicate that 43% of central bankers plan to expand gold holdings in the next year, and 95% expect further global increases in official gold reserves. At the same time, foreign holdings of U.S. Treasuries have stagnated or declined, reflecting both waning international appetite for U.S. debt and confidence in gold’s enduring value.

Leading Holders and Strategic Shifts

The United States remains the single largest gold holder globally, with over 8,100 tonnes, followed by countries like Germany, Italy, France, Russia, and China. However, rapid accumulation by emerging-market central banks underscores a broad, structural transformation in reserve strategies—sometimes called a “global rebalancing”—that could have lasting implications for international finance.

The Road Ahead

Overall, as the global economic landscape grows ever more uncertain, and faith in the dollar-centric system wanes, gold’s prominence as a reserve asset and a symbol of financial power is once again on the rise.