Gold Overtakes US Treasuries as the World’s Top Official Reserve Asset

Central banks’ accumulation of gold reflects a structural shift in the monetary system: gold is becoming a strategic reserve and settlement asset, beyond its traditional hedging function.
According to the World Gold Council, 89% of central banks expect global gold reserves to increase over the next 12 months, and 45% plan to increase their own holdings, a record high. In June 2026, gold accounted for 27% of global official reserves, compared with 22% for US Treasury securities, which it surpassed for the first time since 1996. Purchases have exceeded 1,000 tonnes per year since 2022, twice the average of the previous decade, while the share of central banks holding gold for historical legacy reasons fell from 62% in 2025 to 46% in 2026.
Stöferle (2026) identifies this shift in reserve management as one of the five structural drivers behind this growing enthusiasm. The model developed by Arvai, Coimbra and Pinchetti (2026, NBER/ECB) explains this trend in terms of the political security of reserves. The freezing of Russian reserves in 2022 demonstrated that an asset that is financially safe can still be vulnerable to sanctions, freezing or confiscation. Although US Treasuries offer greater liquidity, holding them depends on legal and payment infrastructures controlled by the issuing state; gold provides greater protection against sanctions but remains less liquid. Our model therefore predicts that countries less aligned with the United States in their UN voting patterns increase their gold reserves more when geopolitical risks intensify: this is insurance against the weaponization of the financial system rather than a search for returns. At the same time, gold could regain a role as a neutral settlement asset in international trade, particularly within the BRICS and a multipolar order. The “In Gold We Trust 2026 report” highlights the growing likelihood of cross-border payments in gold. Hong Kong has launched a gold clearing and settlement system, while the People’s Bank of China (PBoC) increased its reserves for the 21st consecutive month in July 2026.
With no sovereign issuer, default risk or duration, physical gold offers a settlement guarantee independent of controlled channels such as SWIFT and CHIPS.
Finally, flows confirm the diversification trend: 74% of central banks anticipate a moderate or significant decline in the dollar’s share of global reserves over the next five years, and OMFIF finds that more central banks expect to reduce their dollar holdings than to increase them over the coming decade. The growing preference for domestic storage and storage with the BIS, at the expense of the Bank of England and Switzerland, reinforces this pursuit of custodial sovereignty. Gold accumulation therefore represents an investment in monetary sovereignty in response to the political risks facing traditional reserve assets, rather than simply a bet on its price.
_____________
www.steelldy-indices.com | www.scoregex.com