At the end of 2025, the world’s central banks held more gold than US government bonds for the first time since the 1990s. What is behind this change – and how fundamental is it really?
• 27 percent of global central bank reserves consisted of gold at the end of 2025
• Gold prices rose by around 60 percent in 2025
• Central banks purchased around 863 tons of gold in 2025
The numbers behind the turning point
In June 2026, the European Central Bank documented the shift in black and white in its annual report on the international role of the euro: at the end of 2025, gold accounted for 27 percent of the global official reserves of central banks. A year earlier it was only 20 percent, as the ECB report shows. The share of US government bonds also fell to 22 percent. The euro held a 15 percent share of total reserves including gold – to be distinguished from its share of pure foreign exchange reserves, which, according to the ECB, is just under 20 percent.
It is the first time since 1996 that foreign institutions have held more gold than U.S. Treasury securities in their reserves, the ECB said in its report. The world’s central banks now own more than 36,000 tons of gold, approaching the Bretton Woods level of around 38,000 tons that was last recorded in the early 1970s.
Price or principle?
However, the ECB itself is curbing hasty conclusions. The increase in gold content “reflects to a significant extent valuation effects,” the report says. If you evaluate the gold holdings at the prices at the end of 2023, its share falls from 27 percent to around 16 percent – and US government bonds are still at 26 percent. The reason is the strong increase in the price of gold, which rose nominally by around 60 percent in 2025 according to the ECB report, after having already gained around 27 percent in 2024, as the World Gold Council noted in its annual report for 2024.
A significant part of the shift is therefore computational in nature. Central banks have increased their gold holdings, but not to the extent that the changed share value suggests. Nevertheless, the structural willingness to buy remains real and persistent: According to the World Gold Council, central banks purchased a total of around 863 tons of gold in 2025 – this remains a historically high value, even if the pace has slowed after three years with more than 1,000 tons each.
Who buys and why
The main drivers of the buying cycle are well known. According to the ECB report, China has accumulated more than 350 tons of gold since 2022, Poland around 320 tons, Turkey around 220 tons and India around 130 tons. Washington’s decision in 2022 to freeze its dollar reserves after Russia’s invasion of Ukraine is seen as a decisive accelerator. This step triggered a sober cost-benefit analysis among many central banks: gold carries no government counterparty risk and cannot be blocked or sanctioned.
ECB President Christine Lagarde stated the overarching theme directly in their foreword to the report: “Geopolitical tensions continue to drive strong central bank demand for gold.” The most current available data shows that this trend is continuing: According to the World Gold Council, central banks purchased a net 244 tons of gold in the first quarter of 2026 – the strongest quarterly result in more than a year.
US government bonds under pressure
However, the mistrust is not exclusively directed at the sanctionability of dollar reserves. Central banks are also becoming increasingly critical of the US budget situation. Concerns about long-term fiscal stability, rising debt burdens and questions about the Federal Reserve’s independence are accelerating the reduction of Treasury positions, according to Reuters analysis. However, the US dollar remains operationally dominant: According to the BIS Triennial Survey 2022, the US dollar is involved in 88.5 percent of all foreign exchange trading transactions.
But the reserve structure is another level, and there the weights shift slowly but measurably. The IMF tracks this development in its COFER statistics with an important methodological caveat: If the dollar quota is adjusted for exchange rate movements, the actual decline in the US dollar share of foreign exchange reserves in the second quarter of 2025 was significantly smaller than the raw data suggests. The uncorrected decline from 57.79 percent to 56.32 percent shrank to just 0.12 percentage points after exchange rate adjustments. Structural departures and statistical distortions are difficult to separate in this debate – this applies to the US dollar as well as to gold.
A historical comparison with borders
1996 was the last time gold outperformed U.S. Treasury securities in global reserves. At that time, however, the decline in the gold share occurred from a different starting point: many Western central banks actively sold their holdings after the end of Bretton Woods, while government bonds became more important as a modern reserve instrument. Today the movement is in the opposite direction – central banks are buying gold, not because they fundamentally reject government bonds, but because they want to diversify and hedge their portfolios.
At that time, gold was the foundation of the international monetary system; today it is a raw material with a reserve function. The US dollar still clearly dominates global foreign exchange reserves at around 57 percent, as the ECB report shows. According to the ECB, dollar-denominated assets as a whole, i.e. government bonds, bank deposits and other instruments, account for around 42 percent of total official reserves.
What remains of the US dollar
The ECB’s findings can be summed up in one sentence: central banks are diversifying their reserves, they are not leaving the US dollar. Currency remains the dominant instrument in global payments, commodities trading and trade finance. What is changing is the composition of the reserve buffers – away from a monoculture of government bonds, towards a broader hedging in which gold once again occupies a strategic place. UBS analysts wrote in their June 3, 2026 CIO House View that this process describes a “more resilient reserve structure in a world with higher geopolitical risk” – not the beginning of a new reserve currency order.
Whether the gold content remains at its high level ultimately depends largely on the price. If the price of gold falls noticeably, its reserve share automatically shrinks – without a single ton being sold. Because the valuation effect that the ECB formulated works in both directions.
Paul Schütte, editorial team at finanzen.net