Gold Surpasses Euro as Global Reserve Asset, Implications for Investors
In a historic shift, gold has surpassed the euro to become the second-largest global reserve asset, second only to the U.S. dollar. This development isn’t just an economic milestone; it may represent a deeper change in how institutions and governments view long-term financial security.
Let’s break down what’s happening, why it matters, and how it could potentially impact your wealth strategy.
Why Are Central Banks Increasing Their Gold Reserves?
Over the past three years, central banks—particularly in emerging markets—have steadily increased their gold holdings. Annual purchases have exceeded 1,000 tonnes, reaching levels not seen since the post-World War II Bretton Woods era.
This shift may reflect a broader effort among governments to diversify reserve assets away from fiat currencies and toward physical stores of value.
A Surge in Gold Demand – and Price
Alongside this institutional demand, the price of gold has seen substantial gains. Between 2022 and 2024, the price of gold rose sharply, with some reports citing peaks near $3,510 per troy ounce.
Several factors have contributed to this momentum: geopolitical uncertainty, global inflation, fiscal unpredictability, and periods of instability that may lead investors to consider gold as a potential hedge or safe-haven asset.
Why Gold Appeals to Central Banks Today
Central banks appear to be shifting toward gold for reasons beyond simple diversification. Based on recent patterns, gold may offer unique advantages compared to fiat currencies:
- Sovereign Control Without Counterparty Risk: Gold is a tangible asset that governments can hold independently—without reliance on another nation’s creditworthiness or policies. Unlike fiat currencies, it doesn’t carry direct default or policy risk.
- Resilience Amid Interest Rate Volatility: While traditionally influenced by real interest rates, gold has recently held its value even in rising-rate environments, offering a potential buffer against market shifts.
- Long-Term Stability in Times of Crisis: Gold has historically maintained purchasing power through major global disruptions—from the 2008 financial crisis to the COVID-19 pandemic and recent military conflicts.
Global Reserve Asset Rankings (as of 2025)
According to the latest IMF data:
- The U.S. dollar accounts for ~ 46% of total global reserves.
- Gold accounts for ~ 20% and is trending upward.
- The euro accounts for ~ 16% and is trending downward.
Nations such as China, India, Turkey, Poland, and Azerbaijan have been among the most active in increasing their gold reserves—potentially signaling a long-term diversification strategy.
Ashley Garcia
Ashley Garcia is an expert writer on precious metals with over 10 years of experience. She educates readers on investment strategies and market trends.