How gold overtook U.S. Treasurys as number-one reserve asset

By Steve Goldstein

Gold's an awkward asset for central banks to hold, but it's number-one anyway.

The debt of the world's biggest economy is no longer the primary reserve asset for central banks worldwide.

The European Central Bank on Tuesday said that gold has overtaken U.S. Treasurys for top billing.

The share of gold in total official foreign reserves - comprising both foreign exchange and gold holdings - had increased to 27% at the end of 2025, moving ahead of U.S. Treasurys at 22%.

Share of central-bank holdings by asset.

The move was driven by valuation effects - gold purchases actually slowed down last year, but prices (GC00) surged. Using 2023 prices, Treasurys would still be the top holding, at 26% vs. 16% for gold, the ECB said.

The ECB pointed out the drawbacks of gold as a reserve holding.

"Gold faces limitations as an official reserve asset compared with the major fiat currencies: its price is volatile, it is not remunerated and, when held in physical form, it is costly to store. More importantly, the supply of gold is not fully elastic and does not adjust seamlessly to shifts in international demand for liquidity," the central bank said.

The ECB pointed to survey data suggesting that central banks hold gold not just for diversification but as a hedge against geopolitical risk. The biggest central-bank buyers last year were mostly in troubled parts of the world: Poland, Kazakhstan, Brazil, China and Turkey.

That said, the largest stablecoin issuer, Tether, was an even larger purchaser of gold in 2025, the ECB said.

The point of the annual report is really to look at the euro, which is still solidly in second place behind the U.S. dollar in international usage.

Issuance of international debt denominated in euro reached its highest level since the currency's inception, the ECB said, and the euro became the leading currency in the green and sustainable international bond market.

The euro (EURUSD) also behaved like a safe-haven currency during several risk-off events that marked 2025 and early 2026, the ECB said.

-Steve Goldstein

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06-02-26 0703ET