Central banks now hold more gold than US Treasuries for the first time in 30 years

Global central banks now hold more gold than US Treasuries for the first time since 1996, marking a significant shift in their foreign exchange holdings.

Written by Sunil Dhawan

August 31, 2025 07:11 IST

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Gold has overtaken the euro to become the second most important reserve asset after the U.S. dollar. (Federal Reserve Bank of New York Bloomberg)

Global central banks are now holding more gold than US Treasuries. For the first time since 1996, central banks’ foreign exchange holdings hold more gold than US Treasuries.

Crescat Capital macro strategist Tavi Costa highlighted this in a post on X, saying, “This is likely the beginning of one of the most significant global rebalancings we’ve experienced in recent history.”

Central Banks’ Gold Holdings

Central banks now officially hold 36,344 tonnes of gold as of May 2025. The total gold purchased by central banks in 2020 and 2021 was less than 1,000 tonnes. And then the big demand for gold from central banks was seen.

According to the World Gold Council, global central banks bought 1,082 tonnes of gold in 2022, 1,037 tonnes in 2023, and a record 1,180 tonnes in 2024. This is a huge increase from the average 400-500 tonnes of gold purchased during the previous decade.

Gold now ranks as the second most significant foreign exchange reserve asset held by central banks, with 20%, surpassing even the euro with 16%, after the USD, which holds 46%.

However, of late, the buying of gold by central banks has eased a bit. According to WGC data, central banks’ purchases are showing a falling trend in the first 2 quarters of 2025 – 244 tonnes of gold in Q1, and 166 tonnes in Q2.

Metals Focus, a leading independent precious metals research consultancy firm, estimates that central banks will end 2025 by buying 8% less but will still end up with 1,000 tonnes of purchases.

So, are they still interested in gold? The WGC’s Central Bank Gold Reserves Survey 2025 revealed that 43% of central bankers plan to increase their gold reserves over the next 12 months.

Why are central banks buying gold

The dollar’s status as the global reserve currency is under threat due to the US debt position. When economic and fiat currencies are threatened by shifting geopolitical factors, gold becomes more appealing. The IMF claims that although the US dollar is the most widely used reserve currency in the world, its influence is steadily waning.