Gold Surpasses US Treasuries for the First Time in 30 Years

Core Insights - For the first time since the mid-1990s, foreign central banks hold more gold than U.S. Treasuries, indicating a significant shift in global financial safety and trust perspectives [1] - Central banks are on track to purchase approximately 900 tonnes of gold in 2025, marking the fourth consecutive year of purchases exceeding twice the long-term average [2] - The longest streak of gold buying by central banks has reached 16 years, reversing a trend of net selling that lasted over two decades prior to 2010 [3] Central Bank Activity - In the first half of 2025, 23 countries expanded their gold reserves, reflecting a persistent trend where central banks cannot stop buying gold [4] - The rise in gold prices is linked to the decline of the Federal Reserve's reverse-repo balances, indicating a shift in liquidity management [4][5] - Gold is increasingly viewed as a reliable asset, transitioning from merely an inflation hedge to a form of pristine collateral [5] Trust and Financial Stability - The widening trust gap in U.S. Treasuries is highlighted by the government spending nearly 23 cents of every dollar on interest, alongside declining foreign confidence due to political gridlock and escalating debt [6]