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 the way global power views security, 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, and central banks continued their record streak of gold purchases through 2025.
According to the World Gold Council, central banks bought 19 net tons in August alone, after adding 10 tons in July. With this, they headed into the year with approximately 900 tons in total. It would be the fourth consecutive year in which global purchases exceeded twice the long-term average.
The Kobeissi Letter points out that central banks have been buying gold for 16 years. This is the longest streak on record and comes after these financial institutions were net sellers for more than 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 goes deeper than inflation, with macroeconomic researcher Sunil Reddy highlighting that gold’s latest surge follows the collapse of the Federal Reserve’s reverse repo balances. This is the group where excess liquidity is used to park safely overnight.
“When those balances almost disappeared, gold went vertical… Capital seeks what it cannot default on: hard money. Gold is no longer just a hedge against inflation; it is becoming pristine collateral: the asset of the ultimate trust,” he said.
That trust gap is widening, with reports indicating that the U.S. government now spends nearly 23 cents of every dollar of revenue on interest. At the same time, foreign confidence in Treasuries declines amid political gridlock and escalating debt.