Gold Overtakes the Dollar in Central Bank Reserves for the First Time in 30 Years

From an editorial perspective, the significance lies in what is not being said. A profound transformation is underway in the global financial system — and it is unfolding quietly, balance sheet by balance sheet.

For the first time in nearly 30 years, gold has surpassed the U.S. dollar–denominated assets in central bank reserves. This is not a short-term market reaction, but evidence of a structural reconfiguration of the world’s monetary architecture.

What the data shows

The share of the U.S. dollar in global foreign-exchange reserves has fallen to around 40%, the lowest level in more than two decades. Over the past ten years alone, the dollar’s share has declined by roughly 18 percentage points.

At the same time, gold now accounts for approximately 28% of global reserves — its highest level since the early 1990s.

In absolute terms, central banks now hold close to $4 trillion worth of physical gold, exceeding the roughly $3.9 trillion in U.S. Treasury securities held by foreign investors.

For the first time since 1996, gold holdings have overtaken U.S. Treasuries. Even more striking, gold now outweighs the combined reserve holdings of the euro, Japanese yen and British pound.

Why central banks are doing this

This is neither panic nor speculation. It reflects a deliberate and coordinated strategy to diversify away from geopolitical and currency risk.

Gold offers something fiat reserve assets cannot: it sits outside any single jurisdiction. It cannot be frozen, sanctioned, or diluted through monetary expansion. In an environment of rising geopolitical fragmentation, that attribute has become increasingly valuable.

The trend began after 2014 and accelerated sharply following 2022. Central banks in China, India, Turkey and Russia have been among the most consistent buyers, signalling that the shift is long-term rather than cyclical.

Central banks vote with their balance sheets — and they are voting for neutrality.

The world is not abandoning the dollar overnight. Instead, quarter by quarter, it is constructing a parallel reserve infrastructure. Gold is becoming its foundation.

What it means for investors

When the world’s largest monetary institutions accumulate an asset consistently for more than a decade, it points to a structural trend, not a tactical trade.

Allocating 5–15% of a portfolio to gold is increasingly viewed not as a speculative bet, but as insurance against systemic risks — currency debasement, geopolitical shocks and potential debt stress.

This role becomes particularly relevant when real interest rates approach zero or turn negative.

Common instruments

• Physical gold
• Gold-backed ETFs
• Gold mining equities for more aggressive strategies

Investors should remember that gold does not generate income. It pays no dividends and no coupons. Its strength lies in protection, not long-term compounding.

The approach is simple: do not chase price — maintain allocation through disciplined rebalancing. That, notably, is exactly how central banks are behaving.