For the first time since 1996, foreign central banks now hold a larger share of their international reserves in gold than in U.S. Treasuries, a significant shift in the global financial landscape.
GLD ETF is still shiny. Check its real-time prices, here.
More Gold Than US Treasuries For The First Time In 30 Years
This crossover moment was highlighted in a chart shared by Otavio (Tavi) Costa, a macro strategist at Crescat Capital, on the social media platform X.
The chart, based on Bloomberg data, shows that gold holdings as a percentage of foreign reserves have been steadily climbing since the mid-2000s, while the proportion of U.S. Treasuries has been in a gradual decline.
As of Aug. 27, the lines have officially crossed, signaling a potential new era in central bank reserve management.
The Buying Streak Is Not Ending Just Yet
In his post, Costa underscored the gravity of this development, stating, “This is likely the beginning of one of the most significant global rebalancings we’ve experienced in recent history, in my view.”
He urged followers to “Let that sink in,” pointing to historical precedents from the 1970s as a potential indicator of what might follow this trend.
See Also: Fed’s Dovish Turn Puts Gold ETFs In The Limelight: Top Picks To Cash In
Central Banks Diversify Holdings
This move away from U.S. debt and towards the precious metal reflects a broader trend of diversification among the world’s central banks. Geopolitical uncertainty and a desire to reduce reliance on the U.S. dollar are seen as key drivers behind this strategic shift.
The sustained buying of gold by central banks in recent years has been a major factor supporting the metal’s price. The latest data point, as highlighted by Costa, is not only continuing but accelerating, with profound implications for the future of global finance and the status of the U.S. dollar as the world’s primary reserve currency.
Price Action
Gold Spot US Dollar fell 0.16% to hover around $3,391.69 per ounce, as of the publication of this article. Its last record high stood at $3,500.33 per ounce. The price of the precious yellow metal has surged 18.66% over the last six months and 35.51% over the last year.
Here is a list of a few gold ETFs that investors can consider as the central banks ramp up their gold reserves.
| Gold ETFs | YTD Performance | One Year Performance |
| Franklin Responsibly Sourced Gold ETF FGDL | 27.61% | 34.99% |
| Goldman Sachs Physical Gold ETF AAAU | 27.58% | 35.19% |
| GraniteShares Gold Trust BAR | 27.67% | 35.30% |
| VanEck Merk Gold ETF OUNZ | 27.46% | 35.15% |
| SPDR Gold Trust GLD | 27.42% | 34.93% |
| iShares Gold Trust IAU | 27.54% | 35.10% |
| SPDR Gold MiniShares Trust GLDM | 27.63% | 35.31% |
| abrdn Physical Gold Shares ETF SGOL | 27.53% | 35.14% |
| iShares Gold Trust Micro IAUM | 27.64% | 35.29% |
| Invesco DB Precious Metals Fund DBP | 26.59% | 28.30% |
The U.S. Dollar Index spot was 0.13% lower at the 98.1080 level. The dollar has declined by 9.60% on a year-to-date basis.
Meanwhile, the 10-year Treasury bond yielded 4.22% and the two-year bond was at 3.62%, as of the publication of this article.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.23% at $646.63, while the QQQ also advanced 0.15% to $573.49, according to Benzinga Pro data.
On Thursday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading in a mixed manner.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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