Asia's Gold Rush: Central Banks Diversify Amid Dollar Dominance

Asian central banks are increasing their gold holdings, but this trend suggests diversification rather than a wholesale retreat from the US dollar.

Economist Tian Yong Woon's analysis of securities holdings and reserve allocations reveals that several countries in Asia have significantly increased their gold reserves over the past eight years. Thailand, for instance, has added more than 50% to its gold holdings since 2012, while Singapore has seen a rise of over 60%. China's gold reserves have also grown by nearly 30% during this period.

Japan and China, however, have seen their share of US securities decline. Japan's share fell from 14.5% in 2012 to around 8% in July 2026, while China's dropped from 13.4% to approximately 3%. Despite this, Japan remains the largest foreign holder of US Treasury securities with over $1.1 trillion.

Woon warns that changes in the composition of foreign creditors do not necessarily indicate investors abandoning dollar assets. The data suggests reserve diversification has no single beneficiary and is instead a gradual shift across currencies.