For the first time since 1996, the world’s central banks hold more gold than U.S. Treasury securities. Gold now accounts for roughly 27% of global official reserves against roughly 22% for Treasuries, according to the European Central Bank.
The movement is not finished. In this year’s World Gold Council survey, a record 45% of central banks said they intend to increase their gold holdings over the coming twelve months.
The context is the Treasury market, which, according to a very mild treatment of the issue in the Financial Times on Monday morning, Aug. 24, has been thrown into confusion by a combination of sudden, impulsive moves by President Trump—such as his Iran war “decisions,” and his decision to impose tariffs on Canadian imports over the weekend—and the refusal of Fed Chair Kevin Warsh to provide guidance to that market. Making matters worse was Treasury Secretary Scott Bessent’s sudden Aug. 19 decision, to double the size of its buybacks of its own longer-term securities, from $2 billion to $4 billion per operation, in order to stop those long-term rates from rising.