Central banks around the world now hold more gold than U.S. Treasuries in their reserves, a shift not seen since 1996. The milestone comes as official sector gold buying continues to accelerate, pushing total holdings to a record high.
Why the shift matters
For decades, U.S. government debt was the go-to reserve asset for central banks. But that's changing. Gold holdings have climbed steadily, overtaking Treasuries for the first time in 28 years. The data, compiled from central bank reports and the International Monetary Fund, shows the trend is broad-based, with buyers in emerging markets and developed economies alike.
What the prediction market says
One prediction market now gives gold a 3.9% chance of hitting $10,000 an ounce by December. That's a long shot, but it reflects a growing appetite for the metal among some traders. The same market had gold at a lower probability just a few months ago.
The move into gold isn't just about price speculation. Central banks are diversifying away from dollar-denominated assets, a process that has been underway for years. Gold offers a hedge against currency risk and geopolitical uncertainty, and it doesn't carry the same counterparty risk as government bonds.
The prediction market's bet on $10,000 gold will be settled in December. Whether or not that target is hit, the record central bank holdings signal a lasting shift in how the world's monetary authorities manage their reserves. Investors will be watching the next round of central bank buying data closely.
