In 2025, world international reserves held in gold surpassed foreign official holdings of U.S. Treasury securities, a development that drew attention from media and policymakers. But a Federal Reserve FEDS Note published September 3, 2026, argues that this does not mean gold overtook Treasury securities in appeal as a reserve asset. The comparison is problematic for two reasons: the rise in gold's market value since 2024 was primarily driven by a surge in gold prices from private sector demand, and the rise in gold's share of global reserves is mostly accounted for by a handful of countries with large legacy holdings from the Bretton Woods era that have not accumulated gold in any meaningful amount since the 1970s.
The sharp increase in the market value of world gold reserves since 2024 was fueled by a jump in private sector demand that boosted gold prices. This surge does not reflect a concurrent spike in central bank purchases. While central bank purchases of gold likely increased substantially in 2022, those banks have only maintained that elevated pace since then. Rather, demand from private sector investors jumped in late 2024, manifesting in inflows to physical gold-backed exchange traded funds. The FEDS Note states that while the spectacular rise in gold prices witnessed in 2025 likely required strong demand from both private and official investors, the demand from official investors in isolation would not have been sufficient to cause a surge in prices.
The comparison is further distorted by the inclusion of U.S. gold reserves. Foreign official holdings of U.S. Treasury securities by definition exclude the Federal Reserve as a holder, but the series for world gold reserves includes those held by the U.S. government. The U.S. is the largest holder of gold reserves, accounting for 22 percent of the world total. Excluding U.S. gold reserve holdings, world gold reserves were $0.8-$1.1 trillion below the headline gold reserve number throughout much of 2025. At end-2025, world gold reserves stood at $5.1 trillion, and world gold reserves excluding the U.S. at $4 trillion, both exceeding foreign official holdings of U.S. Treasury securities of $3.9 trillion. But the FEDS Note emphasizes this largely reflects large valuation changes rather than any sharp uptick in central bank accumulation over the prior 18 months. By June 2026, foreign official holdings of Treasuries again surpassed world gold reserves excluding the U.S. in dollar terms despite further increases in gold reserves as measured in fine troy ounces.
The composition of gold holders also undermines the overtaking narrative. Despite accumulation by many emerging market central banks beginning in 2008, most world gold reserves were still acquired prior to 1971, the de facto end of the Bretton Woods system. By contrast, most foreign official holdings of Treasuries were accumulated after 2000. The five largest holders of gold reserves—the U.S., Germany, Italy, France, and the IMF—account for about 52 percent of current world gold reserves but have not accumulated gold in any meaningful amount since the 1970s. Moreover, the U.S., Germany, France, and Italy have not accumulated substantial foreign exchange reserves either, so gold now, at its current market price, accounts for more than 80 percent of international reserves in each country. Looking outside the five largest holders, Treasury securities are still a larger part of international reserve portfolios: foreign official holdings of Treasury securities were around $1 trillion larger than gold reserves in June 2026, despite the valuation-driven narrowing of the gap over the past year.
The FEDS Note acknowledges limitations in the data. There may be substantial official sector purchases of gold after 2021 not reported in the official statistics published by the IMF. On the other hand, true foreign official holdings of U.S. Treasury securities are likely larger than what is reported in the TIC data as well, due to some official investors' use of non-reported channels. The note also observes that after 2021, foreign official investors have purchased nearly $200 billion of U.S. Treasury securities on net from 2022 through April. What to watch is whether the valuation-driven gap continues to narrow, and whether reported central bank gold purchases accelerate beyond the elevated but stable pace seen since 2022.