Gold has overtaken US Treasuries as the leading reserve asset held by global central banks, reflecting a significant shift in reserve management strategies amid rising geopolitical uncertainty [1]. According to data from the European Central Bank (ECB), the share of gold in total official foreign reserves increased to 27% at the end of 2025, up from 20% a year earlier. In contrast, the share of US Treasuries declined from 25% to 22%, while the Euro's share remained stable at 15% [1]. This development was first reported by the Financial Times [1].
The ECB attributes the rise in gold's share primarily to valuation effects, as gold's price rally during 2025 mechanically boosted its proportion in reserves. In terms of physical purchases, central bank acquisitions of gold slowed to around 850 tonnes in 2025, compared to over 1,000 tonnes annually between 2022 and 2024 [1]. Despite the slowdown, some central banks increased their gold holdings to strengthen their balance sheets and hedge against geopolitical risks, as indicated by survey data cited in the ECB report [1].
Poland emerged as the largest central bank purchaser in 2025, acquiring 100 tonnes of gold, followed by Kazakhstan, Brazil, China, and Türkiye. Additionally, stablecoin issuer Tether bought more than 100 tonnes of gold in 2025 [1]. However, the report notes that some central banks, such as Türkiye, have sold or loaned portions of their gold reserves in 2026 to mitigate economic fallout from the Iran war. Specifically, the Turkish central bank sold or loaned around 130 tonnes of gold to defend the Lira, marking one of the largest reserve drawdowns in recent years according to the ECB [1].
Central bank demand has been a key catalyst for gold prices and contributed to the precious metal's strong rally in 2025. The evolving composition of reserve assets indicates a broader trend among countries to reduce reliance on the US Dollar, even as it remains the world's dominant reserve currency [1].
CONCLUSION
The shift toward gold as the top reserve asset underscores central banks' efforts to diversify and hedge against geopolitical risks. This trend has supported gold prices and signals a move away from US Treasuries and the US Dollar, with significant implications for global financial markets.