Gold hit a historic milestone, and the Fed's seemingly reasonable "cold shoulder" actually avoids the core trend.
2026-09-07 21:58:08
There's a wise old saying in the business world: if something is already attracting widespread attention, and someone insists on explaining that "it's not that important," it precisely means that the matter is far more significant than it appears on the surface. A review of the Federal Reserve's latest research interpretation provides the most fitting evidence for this statement. Previously, the market witnessed a historic breakthrough for gold: by 2025, the total market value of official gold reserves held by all countries will officially surpass the market value of US Treasury bonds held by all countries. 
This milestone was first realized in 2025 and subsequently gained recognition from top financial institutions such as the International Monetary Fund (IMF), completely reshaping the landscape of global reserve assets. However, the Federal Reserve stepped in to "cool things down," attempting to downplay the significance of this event from a technical perspective. The timing of the Fed's statement is particularly intriguing. Just recently, the US Treasury announced that it would double its holdings of long-term US Treasury bonds through a bond repurchase program. Although the official stance did not acknowledge this as yield curve manipulation, the market cannot ignore this signal. The logic is simple: if there is sufficient private and institutional demand for long-term US Treasury bonds in the market, the US government has no need to intervene directly to support the market and supplement liquidity. Against this backdrop, gold's position in the global reserve system continues to rise and should not be downplayed; rather, it deserves the full attention of the market. Objectively speaking, the Fed's interpretation is not entirely without merit, and its two points of contention have some merit. First, the core driver of gold reserves surpassing US Treasury bonds is the sharp rise in international gold prices, not the recent frenzied gold purchases by central banks around the world. The historical difference in gold purchases is not due to an explosive surge in central bank gold buying, but rather to the valuation increase in gold prices. Secondly, a large portion of current global gold reserves consists of assets inherited from the Bretton Woods system, representing decades of accumulated reserves, not the result of recent proactive deployments by various countries. However, these technical details cannot erase the core significance of this milestone. Even data from the Federal Reserve itself confirms that even excluding the massive gold reserves held by the United States, the market value of global sovereign gold reserves will still reach $4 trillion by the end of 2025, slightly exceeding the $3.9 trillion in US Treasury bonds held by various countries. More importantly, the actual actions of central banks have already demonstrated the continuously increasing strategic value of gold. In recent years, global central bank gold purchases have remained high, with the annual purchase volume more than doubling the average level of the past decade. Related industry surveys show that a record high of 45% of central banks plan to continue increasing their gold holdings in the next 12 months; and 89% of institutions predict that the total global central bank gold reserves will continue to rise. Looking at a longer time horizon, 84% of industry institutions believe that gold's share in global reserves will continue to rise over the next five years; 74% of institutions are certain that the US dollar's share in the global reserve system will gradually decline. This consensus demonstrates that central banks no longer consider gold an "outdated relic of the Bretton Woods system," but rather a genuine core strategic asset. Of course, these changes do not mean that the US dollar will immediately lose its dominant global reserve currency status, nor does it mean that US Treasury bonds have completely lost their value. To this day, US Treasury bonds remain the most liquid and deeply traded core financial asset globally, and their market position is unlikely to be shaken in the short term. But this is not the key point. The truly noteworthy core trend is that the reserve allocation logic of global central banks has fundamentally changed. Countries no longer rely solely on the US dollar and US Treasury bonds, but instead regard gold as a core strategic tool that runs parallel to, and can even replace, some US dollar assets. The Federal Reserve can use various technical details to explain the "accidental" nature of gold surpassing US Treasury bonds, but it cannot avoid or downplay the profound changes behind this milestone: gold has once again become a crucial core monetary asset in the global financial system.
This milestone was first realized in 2025 and subsequently gained recognition from top financial institutions such as the International Monetary Fund (IMF), completely reshaping the landscape of global reserve assets. However, the Federal Reserve stepped in to "cool things down," attempting to downplay the significance of this event from a technical perspective. The timing of the Fed's statement is particularly intriguing. Just recently, the US Treasury announced that it would double its holdings of long-term US Treasury bonds through a bond repurchase program. Although the official stance did not acknowledge this as yield curve manipulation, the market cannot ignore this signal. The logic is simple: if there is sufficient private and institutional demand for long-term US Treasury bonds in the market, the US government has no need to intervene directly to support the market and supplement liquidity. Against this backdrop, gold's position in the global reserve system continues to rise and should not be downplayed; rather, it deserves the full attention of the market. Objectively speaking, the Fed's interpretation is not entirely without merit, and its two points of contention have some merit. First, the core driver of gold reserves surpassing US Treasury bonds is the sharp rise in international gold prices, not the recent frenzied gold purchases by central banks around the world. The historical difference in gold purchases is not due to an explosive surge in central bank gold buying, but rather to the valuation increase in gold prices. Secondly, a large portion of current global gold reserves consists of assets inherited from the Bretton Woods system, representing decades of accumulated reserves, not the result of recent proactive deployments by various countries. However, these technical details cannot erase the core significance of this milestone. Even data from the Federal Reserve itself confirms that even excluding the massive gold reserves held by the United States, the market value of global sovereign gold reserves will still reach $4 trillion by the end of 2025, slightly exceeding the $3.9 trillion in US Treasury bonds held by various countries. More importantly, the actual actions of central banks have already demonstrated the continuously increasing strategic value of gold. In recent years, global central bank gold purchases have remained high, with the annual purchase volume more than doubling the average level of the past decade. Related industry surveys show that a record high of 45% of central banks plan to continue increasing their gold holdings in the next 12 months; and 89% of institutions predict that the total global central bank gold reserves will continue to rise. Looking at a longer time horizon, 84% of industry institutions believe that gold's share in global reserves will continue to rise over the next five years; 74% of institutions are certain that the US dollar's share in the global reserve system will gradually decline. This consensus demonstrates that central banks no longer consider gold an "outdated relic of the Bretton Woods system," but rather a genuine core strategic asset. Of course, these changes do not mean that the US dollar will immediately lose its dominant global reserve currency status, nor does it mean that US Treasury bonds have completely lost their value. To this day, US Treasury bonds remain the most liquid and deeply traded core financial asset globally, and their market position is unlikely to be shaken in the short term. But this is not the key point. The truly noteworthy core trend is that the reserve allocation logic of global central banks has fundamentally changed. Countries no longer rely solely on the US dollar and US Treasury bonds, but instead regard gold as a core strategic tool that runs parallel to, and can even replace, some US dollar assets. The Federal Reserve can use various technical details to explain the "accidental" nature of gold surpassing US Treasury bonds, but it cannot avoid or downplay the profound changes behind this milestone: gold has once again become a crucial core monetary asset in the global financial system.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
