Central Banks Overtake Treasuries as Largest Reserve Asset Class

Gold's price may not be impressive at first glance, having dipped to around USD 4,382.82 an ounce on Friday after a 0.9% gain for the day. However, a closer look reveals significant shifts in ownership and demand.

The European Central Bank reported that gold now makes up 27% of global currency reserves, surpassing US government bonds as the largest reserve asset class at the end of 2025. This is not a fleeting trend, but rather the result of years-long reallocation by central banks.

China's People's Bank has been leading this charge, adding over 20 tonnes in August and marking its 22nd consecutive month of purchases. Worldwide, central banks have been buying around 91 tonnes per month since pre-2022 averages of just 17 tonnes monthly.

Goldman Sachs expects this elevated pace to moderate, but remain historically high, forecasting an average of 60 tonnes per month across 2026 and 2027.