Gold Nears Historic Supremacy Over US Treasury Holdings

Gold is set to surpass US Treasury bonds as the largest overseas reserve asset for US governments, boosted by rising gold prices and increased central bank purchases, according to PANews.

This shift indicates a growing preference for gold over dollar reserves amid inflation and geopolitical concerns, potentially influencing global financial markets and economic policies.

Gold Reserves on Track to Surpass $3.88 Trillion in Treasuries

The World Gold Council has released data indicating that official US gold reserves held by foreign governments are on the brink of surpassing US Treasury bonds in value. This change is primarily attributed to the rising price of gold and active purchasing by global central banks. By late 2023, if trends persist, the value of gold held globally will surpass long-term and short-term US Treasury values previously reported at $3.88 trillion.

Gold’s potential overtaking of US Treasuries as the primary reserve asset signals changing priorities in global finance, influenced by inflation and dollar vulnerability. One analyst noted, “Central banks are moving toward gold as a hedge against prevailing economic uncertainties.”

Governments and market analysts are keenly observing these trends. The lack of prominent central bank declarations might imply a cautious approach until year’s end data confirms the shift. Attention from media and analysts is evident, given the possible implications for currencies and other reserves.

Revisiting 1996: Gold’s Last Supremacy Over Treasuries

Did you know? Central banks last had more gold reserves than US Treasuries in 1996, marking a pivotal moment in asset management within global reserves.

Bitcoin’s current trajectory offers insights as the primary cryptocurrency trades at $92,712.37 with a market cap of approximately $1.85 trillion. According to CoinMarketCap, Bitcoin’s 24-hour volume was $54.67 billion, showing traders’ growing interest. Over the last 90 days, Bitcoin’s price faced a decline of 24.05%.

The Coincu research team highlights the potential for increased geopolitical tensions and inflation pressures encouraging a shift to tangible assets like gold. This trend underscores the volatility in reliance solely on paper assets and dollar-denominated reserves.