• Gold surpassed U.S. Treasuries as the largest central bank reserve asset by end-2025, accounting for 27% of global reserves versus 22%.
  • The historic shift is driven by soaring gold prices and sustained central-bank buying, led by China's 18-month purchasing streak.
  • Diversification away from dollar-denominated assets reflects inflation, geopolitical risks, and a broader strategy among policymakers.

Central banks have reshuffled their reserve portfolios in a landmark shift, with gold overtaking U.S. Treasuries as the dominant reserve asset for the first time in decades. By the end of 2025, gold constituted about 27% of global central bank reserves, while Treasuries fell to around 22%, according to data compiled from official filings and market estimates.

The reversal caps a years-long trend of official-sector gold accumulation, as policymakers seek to hedge against inflation, geopolitical uncertainty, and the relative stability of dollar-denominated assets. “Central banks are rethinking the traditional reserve mix,” said a senior official at a European central bank, speaking on condition of anonymity. “Gold offers a store of value that is free of counterparty risk and geopolitical pressure.”

China has been at the forefront of this buying spree, with the People's Bank of China extending its gold purchases for 18 consecutive months. Other large holders, including central banks in Poland, Turkey, and India, have also added significantly to their gold reserves. The sustained demand has helped propel bullion prices to record highs, reinforcing a self-reinforcing cycle where higher prices spurred more accumulation.

The shift has not been without consequences. While Treasuries remain a core reserve asset, their reduced share has implications for global liquidity and the dollar's dominance. “This is a structural change, not a cyclical one,” said a managing director at a major asset manager. “We are seeing a gradual unwinding of the dollar-centric reserve system.”

Some analysts caution, however, that gold's liquidity and yield are limited compared to Treasuries, and a sudden sell-off could strain reserve management. Still, the trend shows no signs of abating, with several central banks signaling further purchases in 2026.

Correction: An earlier version of this article mistakenly reported China's gold-buying streak as 15 months. It is 18 consecutive months.