Gold and Treasuries: Complementary Assets for Reserve Management

The relationship between gold and US Treasuries in global reserves is one of complementarity. While gold hedges custodial and jurisdictional risks, Treasuries provide unmatched liquidity.

Claims that there is a shift away from US Treasuries are overstated, as no sovereign bond market matches its liquidity or capacity for large-scale allocations.

Central banks' increased gold holdings reflect insurance needs, not a shift away from Treasuries. This is particularly evident after asset freezes post-Ukraine war, when the preference for Treasury liquidity over gold reinforced their irreplaceable status in reserve management.