In recent years, as central banks around the world have continued to increase their gold reserves, a striking statistic has drawn widespread attention in global markets: in 2025, the book value of global official gold reserves will surpass the size of foreign official holdings of US Treasury bonds for the first time. This milestone has been interpreted by some media outlets as "gold replacing US Treasury bonds as the new favorite reserve asset," even suggesting a weakening of the dollar's status. However, Colin Weiss, chief economist for global capital flows at the Federal Reserve, poured cold water on this notion. In a research note released last Friday (September 4th) Beijing time, he pointed out that such a simplistic data comparison is highly misleading, and that the surge in gold value is not due to a strategic shift by central banks, but rather to the frenzy of private capital and the inertia of historical reserves.

Price Frenzy and Buying Restraint: The Real and the Illusion Behind Gold's Appreciation

In his research, Weiss explicitly refutes the view that "gold's attractiveness has surpassed that of US Treasury bonds," and analyzes the fundamental logical flaws in this comparison. He points out that the core driver of the significant increase in the global gold reserve market value since 2024 is not concentrated buying by central banks, but rather the explosive growth in private sector demand. Weiss emphasizes that the sharp rise in gold prices is not synchronized with the increase in central bank purchases. Although central bank gold purchases did see significant growth in 2022 and remained at a high level thereafter, this is far from sufficient to support the spectacular rise in gold prices in 2025. The real driving force is the influx of private investors at the end of 2024, with this demand concentrated in the inflow of funds into physical gold-backed ETFs. In other words, the expansion of the gold reserve market value is more a result of market speculation and risk aversion pushing up prices, rather than a fundamental shift in official reserve asset allocation strategies. Weiss bluntly states that without the strong impetus of private capital, official investors alone could not have created such a massive price surge.

Historical Stock and Statistical Scope: The Hidden Truth About Reserve Assets

Beyond price factors, Weiss also revealed discrepancies in the comparison by examining the composition and statistical methods of reserve assets. He pointed out that the apparent enormous book value of global gold reserves is largely due to a few countries holding vast amounts of gold inherited from the Bretton Woods system, countries that have not substantially increased their gold holdings since the 1970s. Crucially, the United States itself is the world's largest holder of gold, accounting for 22% of the global total, but since the US cannot use its Treasury bonds as international reserves, its massive gold holdings are naturally included in the "global gold reserves" statistics. Weiss argues that this statistical method leads to a significant exaggeration of global gold reserve data, thus overestimating the true position of gold relative to US Treasury bonds in foreign government reserves. Even excluding US-held gold, the gold reserves of the remaining countries worldwide at the end of 2025 would be approximately $4 trillion, slightly higher than the $3.9 trillion in US Treasury bonds held by foreign governments. However, by June 2026, this gap would be reversed as US Treasury bond holdings rebounded. Weiss further analyzes that the vast majority of global central bank gold reserves are actually a legacy from before the end of the Bretton Woods system in 1971, rather than a proactive accumulation based on de-dollarization strategies in recent years. In contrast, most of the US Treasury bonds held by foreign officials were accumulated after 2000. Countries holding large amounts of gold and those holding large amounts of foreign exchange reserves often do not overlap, which makes a simple value comparison obscure the essential differences in the liquidity and functionality of reserve assets.

The cornerstone of US Treasury bonds remains unshaken: the true choices and strategic considerations of the official market.

Although gold's book value has at times approached or even surpassed that of US Treasury bonds, Weiss emphasizes that if we look at countries that truly have choices in their reserve asset allocation, US Treasury bonds remain the core cornerstone of international reserve portfolios. Weiss's analysis points out that even considering the additional official gold purchases since 2022, as estimated by the World Gold Council, after excluding the five traditional gold-holding giants—the US, Germany, France, Italy, and the International Monetary Fund (IMF)—the remaining countries still hold approximately $0.6 trillion more in US Treasury bonds than in gold. This indicates that for the vast majority of countries with large foreign exchange reserves, US Treasury bonds remain a more important component of their reserve asset allocation. Weiss acknowledges that since 2008, official sectors have indeed been continuously net increasing their gold holdings, and this pace accelerated significantly after 2022. This increase may partly reflect geopolitical considerations and concerns about the risks of sanctions. However, this has not weakened the status of US Treasury bonds. Data shows that from 2022 to April 2026, foreign official investors still net purchased nearly $200 billion in US Treasury bonds. Weiss concluded that despite various complex factors, foreign official investors continue to buy US Treasury bonds, which fully demonstrates that the status of US Treasury bonds as one of the world's most important reserve assets remains solid.

Conclusion

In conclusion, the fact that gold reserves have surpassed US Treasury bonds in market value is more of a "numerical illusion" created by private capital driving up prices and historical stock statistics, rather than a disruptive shift in the global reserve system. Analysis by Federal Reserve experts reveals a deeper logic: the rise of gold is a product of market risk aversion and price volatility, while US Treasury bonds remain an indispensable liquidity cornerstone in the official reserves of various countries. Although official gold purchases do exist, this is more of a supplementary hedge against geopolitical risks than a strategic abandonment of dollar assets. In a complex global economic environment, simply comparing figures on paper is not only distorted but also obscures the true logic and long-term considerations behind reserve asset allocation.