In early 2026, for the first time in 30 years, gold surpassed U.S. Treasuries as the largest foreign reserve asset held by central banks, with gold reserves approaching $4 trillion compared to roughly $3.9 trillion in U.S. debt. This shift is driven by record central bank purchasing, particularly in emerging markets, and surging prices (breaching $4,500/oz) due to concerns over U.S. fiscal sustainability and geopolitical risks.
Historic Shift: Gold has moved ahead of U.S. Treasuries, a milestone last reached in 1996, marking a significant, long-term reallocation of central bank portfolios.
Drivers for Change: The surge is fueled by aggressive buying from central banks aiming to diversify away from the dollar and increase holdings of assets free from default risk and sanctions.
Safe-Haven Demand: Increased geopolitical tensions and concerns over the U.S. debt-to-GDP ratio have increased the appeal of gold, causing it to outperform traditional reserve assets.
Impact on Dollar Status: While gold has surpassed U.S. Treasuries, this is not seen as the immediate end of dollar dominance but rather a major, structural de-risking move by global monetary authorities.
The shift reflects a "Gold-based hedge" against global macro policy risks that many central banks believe will not resolve quickly, according to analysis b
