Gold has quietly overtaken the euro to become the second-largest component of global foreign exchange reserves.
While the US dollar and US Treasuries still dominate, their share has been steadily shrinking as ’s role expands. Central banks now hold gold at roughly 20% of their reserves, compared to the euro’s 16%—levels not seen since the days of the gold standard.
This shift is no short-term blip. It’s a megatrend with enormous implications that investors cannot afford to ignore.
A recent World Gold Council survey of 57 central banks found that the main reason they hold gold is its role as a long-term store of value and a proven hedge against currency debasement.
For decades, US Treasuries were considered the ultimate safe-haven asset. The massive Treasury market is the largest and most liquid in the world, and has long served as the go-to reserve choice for central banks. But cracks are showing. Central banks have been steadily cutting dollar exposure, and the rise of gold signals that confidence in US paper assets is eroding.
The symbolism is powerful. John Maynard Keynes once dismissed gold as a
Gold: The ‘Barbarous Relic’ Overtakes Euro as World’s Second-Largest Reserve Asset
