Major central banks now hold more gold reserves compared to U.S. Treasury securities, marking a significant shift not seen in three decades.

In a significant shift in global financial trends, central banks have been increasingly turning towards gold as a safe haven for their foreign exchange reserves.

Last year, central banks bought a record 1,180 tonnes of gold, marking a significant increase from the average 400-500 tonnes purchased during the previous decade. This trend continued in 2022, with 1,082 tonnes of gold acquired, and in 2023, central banks bought 1,037 tonnes.

This surge in gold purchases has led to a substantial increase in the total gold held by global central banks. As of May 2025, they hold 36,344 tonnes of gold.

The main buyers of gold among global central banks in recent years have been countries like China, Russia, and India. In 2020 and 2021, the total gold purchased by central banks was less than 1,000 tonnes, but this figure has been steadily rising.

The US dollar's status as the global reserve currency is under threat due to the US debt position. The IMF claims that although the US dollar is the most widely used reserve currency in the world, its influence is steadily waning. The euro, on the other hand, holds 16% of central banks' foreign exchange reserves, while gold now ranks as the second most significant foreign exchange reserve asset, with 20%.

The US dollar still holds 46% of central banks' foreign exchange reserves, but this figure has been decreasing. In contrast, gold has been surpassing even the euro in terms of significance as a foreign exchange reserve asset.

Metals Focus estimates that central banks will end 2025 with 8% less gold purchases but still acquire 1,000 tonnes. This is a huge increase from the total gold purchases made in 2020 and 2021.

Central banks' gold purchases have eased a bit in the first 2 quarters of 2025, with 244 tonnes in Q1 and 166 tonnes in Q2. However, 43% of central bankers plan to increase their gold reserves over the next 12 months, according to the WGC's Central Bank Gold Reserves Survey 2025.

The price of gold in India today is Rs 1,03,900, while in Dubai, it is Rs 4,130 for 24 carat 1 gram. The price of silver, which has been added to the list of critical minerals for the US, has jumped 5% in the last month due to this development.

These trends indicate a shift in the global financial landscape, with gold emerging as a significant player in the foreign exchange reserves of central banks. As the US debt position continues to be a concern, and the influence of the US dollar as the global reserve currency continues to wane, it will be interesting to see how these trends develop in the future.

Major central banks now hold more gold reserves compared to U.S. Treasury securities, marking a significant shift not seen in three decades.