ECB’s latest report: Gold historically surpasses U.S. Treasuries to become the world’s largest reserve asset.

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Gold officially replaces U.S. Treasury securities, taking the crown as the world’s largest reserve asset.

According to the latest report released by the European Central Bank on Tuesday, by the end of 2025, gold accounted for 27% of global central bank reserve assets, a significant jump from 20% a year earlier; meanwhile, U.S. Treasury securities’ share dropped from 25% to 22%, allowing gold to overtake them. Gold prices have nearly doubled in the past two years, and in January this year briefly surged past a record high of $5,500 per troy ounce.

This shift has profound implications for the market. The traditional pillar role of U.S. Treasuries as the "ballast" of international dollar reserves is being shaken, while the structural support for gold demand—continuous accumulation by central banks—is unlikely to reverse in the short term. Eurozone assets have also experienced massive capital inflows over the same period, with net inflows reaching 850 billion euros, close to record highs since the euro's inception.

Gold’s share jumps, Treasuries lose leading status in historic shift

The European Central Bank report shows that gold’s share in global central bank reserves jumped from 20% to 27% within a year, while U.S. Treasuries’ share fell from 25% to 22% during the same period. This is the first time gold has surpassed U.S. Treasuries in reserve asset composition, becoming the largest single asset class.

It is noteworthy that dollar-denominated assets overall still account for 42% of total reserves, remaining the largest currency category. The share of euro-denominated reserve assets remained unchanged at 15%.

Gold’s rise comes from both the sustained accumulation by central banks and from significant increases in the gold price. ECB President Christine Lagarde wrote in the report: "Ongoing geopolitical tensions are fueling strong demand for gold from central banks."

Central banks’ gold hoards near Bretton Woods peak

ECB data shows global central banks currently hold over 36,000 tons of gold, close to the peak during the Bretton Woods era—when central banks held about 38,000 tons of gold, with the dollar pegged to gold and other currencies fixed to the dollar.

In 2025, net gold purchases by central banks globally amounted to about 850 tons, slightly slower than the over 1,000 tons bought annually for the previous three years. Since 2022, the countries increasing their gold reserves the most are China, Poland, Turkey, and India, in order.

A new variable worth noting: in 2025, stablecoin company Tether became the single largest gold buyer, purchasing over 100 tons of gold throughout the year, more than most sovereign central banks.

Geopolitics speed up de-dollarization, sanctions in 2022 as tipping point

These deep changes in the composition of reserve assets are rooted in countries’ strategic intentions to seek alternatives to the dollar. The ECB report notes that this trend clearly accelerated from 2022—the year the U.S. froze Russia’s dollar reserves through sanctions, prompting many countries to reassess the risks of holding dollar assets.

Turkey’s case shows how geopolitics can directly affect the dynamic adjustments of gold reserves. Since the outbreak of the Russia-Ukraine conflict in 2022, Turkey has accumulated 220 tons of gold. However, as the Iran war broke out in early 2026, Turkey sold or lent out about 130 tons of gold, which the ECB describes as "one of the largest reserve drawdowns in recent years." 

The ECB report also points out that the euro’s international role has "expanded gradually but steadily" over the past decade. In 2025, the size of international debt issuance denominated in euros grew by 30% to nearly 1 trillion euros—a "historic high"; international investors’ net inflows into eurozone assets reached 850 billion euros, pushing foreign portfolio inflows close to peak levels since the euro’s creation.

Although the share of euro-denominated reserve assets worldwide remained unchanged at 15%, the above capital flow data indicates that euro assets are gaining broader international recognition. Against the backdrop of rising doubts over the dollar’s dominance, the euro’s appeal has increased.

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