For the first time since the mid-1990s, foreign central banks have held more gold than US treasuries. This milestone shows a significant shift in how global power views safety, liquidity, and trust.
Beyond a market event, the quiet rotation from paper to metal marks a potential turning point in the architecture of global finance.
Data shared by Barchart confirmed the crossover, with central banks continuing their record-breaking gold buying streak into 2025.
According to the World Gold Council, central banks purchased a net 19 tonnes in August alone, after adding 10 tonnes in July. With this, they set the year on track for roughly 900 tonnes in total. It would mark the fourth consecutive year that global purchases exceed twice the long-term average.
The Kobeissi Letter noted that central banks have bought gold for 16 years. This is the longest streak on record and comes after these financial institutions were net sellers for over two decades before 2010.
In the first half of 2025, 23 countries expanded their reserves. “Central banks cannot stop buying gold,” Kobeissi wrote.
The reason runs deeper than inflation, with macro researcher Sunil Reddy highlighting that gold’s latest rise tracks the collapse of the Federal Reserve’s reverse-repo balances. This is the pool where excess liquidity is used to park safely overnight.
“When those balances nearly vanished, gold went vertical…Capital seeks what can’t default — hard money. Gold is no longer just an inflation hedge; it’s becoming pristine collateral — the asset of last trust,” he said.
That trust gap is widening, with reports indicating that the US government now spends nearly 23 cents of every dollar of revenue on interest. At the same time, foreign confidence in Treasuries wanes amid political gridlock and debt escalation.
