Gold has officially overtaken the US dollar in market value terms to become the world’s largest global reserve asset, according to recent reports citing World Gold Council data and US Treasury figures. The milestone reflects the market value of central bank gold holdings surpassing foreign holdings of US Treasuries for the first time since 1996.
Estimates suggest central bank gold reserves are now valued at around $4 trillion or more, compared to roughly $3.9 trillion in US Treasuries held by foreign institutions. The shift has been driven by aggressive central bank buying, sustained price rallies above $5,000 per ounce, and increasing diversification away from dollar-denominated assets amid geopolitical tensions and sanctions risks.
However, key clarifications are important. The US dollar remains the dominant global reserve currency by allocation share. IMF COFER data shows the dollar still accounts for nearly 57% of global allocated foreign exchange reserves, far ahead of other currencies. Gold is tracked separately from currency reserves and is not classified as a reserve currency.
The development signals diversification rather than dethronement of the dollar. Emerging market central banks, including China, India, Turkey and Poland, have significantly increased gold purchases in recent years, viewing it as a neutral, non-sanctionable hedge amid rising global fragmentation and fiscal concerns in advanced economies.
Meanwhile, gold prices have rebounded sharply. Futures in New York rose 0.7% to $5,212.10 per ounce in early trading, regaining more than half of the losses from the sharp correction earlier this month. Analysts note that safe-haven demand remains supported by uncertainty around US trade policy and escalating geopolitical risks in the Middle East.
“Gold has stabilised above $5,000/oz,” said Soojin Kim of MUFG, adding that elevated US interest rate expectations could limit further upside for the non-yielding metal.
Silver futures also surged 3.8%, climbing above $90 per ounce, reflecting broader strength across precious metals.