Yellow metal as an alternative: why central banks are reorienting reserve portfolios

A remarkable shift is occurring in the structure of global official reserves. Statistics show that gold assets are gradually gaining weight in the global financial architecture, displacing traditional instruments.

Current State of U.S. Reserves

According to the World Gold Council, the U.S. Treasury holds over 900 million troy ounces of yellow metal. At current prices, this amounts to $3.82 trillion (data as of the end of November). Meanwhile, U.S. government treasury securities held abroad were approximately $3.88 trillion in October.

The gap between these two positions is narrowing each month, prompting analysts to rethink the hierarchy of reserve assets.

Why Central Banks Choose Gold

A wave of gold purchases by central banks is happening against the backdrop of rising gold prices. This behavior of financial authorities is no coincidence — it reflects a reassessment of the reliability of various assets over the investment horizon.

Gold is perceived as a hedge against uncertainty, while treasury bonds are influenced by inflationary processes and interest rate fluctuations. The question of which bonds to buy and in what proportions increasingly leads financial managers to physical metal.

Predicted Turnaround

If the current pace of gold price growth continues, the valuation of U.S. gold reserves could surpass $3.93 trillion before the end of the year. Such a scenario means that the yellow metal will, for the first time, exceed the volume of treasury bonds in the reserve portfolio.

This reordering of asset hierarchy signals a profound rethinking of which instrument can truly be considered a safe store of value in the modern era.