Global central banks are holding more gold in their reserves than U.S. government bonds for the first time in nearly 30 years, a significant shift described as a major “Global Rebalancing.”
This change comes amid growing geopolitical and trade uncertainties.
An analysis by Charles-Henry Monchau, Chief Investment Officer (CIO) at Swiss wealth management firm Syz Group, highlighted this historic reversal.
According to his report, “Foreign Central Banks’ Gold Tops US Treasuries For First Time Since 1996,” nations are now holding more gold reserves than U.S. Treasuries, a first since 1996.
“The world may be witnessing the most significant ‘Global Rebalancing’ we have ever seen in history,” Monchau stated.
Over the past year or two, gold prices have risen steadily, driven by concerns over global instability and the potential changes to the world trade order.
Russia and China, in particular, are rapidly increasing their gold holdings to bolster their economic leverage and provide a safeguard against future crises.
While the U.S. remains the largest single holder of gold with 8,133 tonnes, followed by Germany (3,350 tonnes), Italy (2,452 tonnes), France (2,437 tonnes), Russia (2,330 tonnes), and China (2,299 tonnes), the trend of accelerated accumulation by countries like Russia and China is notable.
Monchau added that gold reserves are also a matter of power. “Those who control the most gold will have an additional layer of bargaining power during times of crisis, sanctions, or currency volatility.”