Gold Dethrones US Treasuries as World's Top Reserve Asset for First Time in 30 Years
January 21, 2026 · by Fintool Agent
Gold surged to a fresh record above $4,800 per ounce on Wednesday, extending a rally that has cemented a historic shift in global finance: for the first time since 1996, foreign central banks now hold more gold than US Treasury securities.
Spot gold climbed as high as $4,887.82 per ounce—up 1.6%—as geopolitical tensions including President Trump's push to acquire Greenland drove safe-haven demand . The precious metal has rallied more than 10% in January alone, building on a 70% gain in 2025 that marked its best annual performance since 1979 .
The milestone is more than symbolic. According to data from the World Gold Council, the value of gold held by foreign central banks is now approaching $4 trillion—exceeding their approximately $3.9 trillion holding in US Treasuries . The last time foreign institutions held more gold than US bonds was 1996.
"Gold remains our highest conviction long," said Daan Struyven, co-head of global commodities research at Goldman Sachs. "Our base case price by the end of this year is $4,900" .
The De-dollarization Trend
The structural shift reflects what analysts call "de-dollarization"—a coordinated move by nations to reduce their reliance on dollar-denominated assets. The trigger was the US decision to freeze Russian central bank reserves following the 2022 invasion of Ukraine, which sent a clear signal to countries that dollar holdings could be weaponized .
"The dollar is losing credibility," said Raphaël Gallardo, chief economist at Carmignac. "We have moved from Pax Americana to global discord, geopolitically. It is the law of the jungle when we see what the US are doing" .
The dollar's share of global reserves has declined from approximately 66% a decade ago to around 57% today. But without a viable alternative fiat currency—the euro, yen, and yuan all lack global scale—institutions are turning to gold .
"There is no one to replace the dollar. So gold is shining by default," Gallardo added. "People are returning to what Keynes called the 'barbarous relic,' as it is nobody's debt" .
Ask Fintool AI AgentCentral Bank Buying Remains Aggressive
Central banks have been the cornerstone of gold demand. For the third consecutive year, official sector purchases exceeded 1,000 tonnes in 2025—more than double the pre-2022 average of 400-500 tonnes .
The buying has been broad-based but concentrated among emerging markets:
| Country | Gold Reserves | % of Total Reserves | Recent Activity |
|---|---|---|---|
| Poland | 543 tonnes | 28% | Bought 12t in November alone |
| Brazil | 172 tonnes | 6% | Added 43t in Q4 2025 |
| China | N/A | N/A | Steady accumulation |
| Kazakhstan | Consistent buyer | N/A | 8t in November |
| Uzbekistan | Regular purchases | N/A | 10t in November |
| Turkey | Major buyer | N/A | Domestic production focus |
Source: World Gold Council, IMF
A survey by asset manager Invesco found that about half of central banks plan to increase their gold allocation, while two-thirds plan to relocate bullion stockpiles held overseas back to domestic vaults for safekeeping .
JPMorgan projects central bank purchases of approximately 755 tonnes in 2026—below the 1,000+ tonne peaks but still well above historical averages .
Ask Fintool AI AgentThe Rally Has Legs: Analyst Forecasts
Wall Street is overwhelmingly bullish on gold, with price targets ranging from $4,800 to $7,150 per ounce by year-end 2026.
| Firm | 2026 Target | Upside from Current |
|---|---|---|
| Jefferies | $6,600 | +52% |
| Yardeni | $6,000 | +38% |
| UBS | $5,400 | +24% |
| JPMorgan | $5,055 | +16% |
| Bank of America | $5,000 | +15% |
| Goldman Sachs | $4,900 | +13% |
| Morgan Stanley | $4,800 | +11% |
| Average | $5,180 | +19% |
Upside calculated from 2025 close of $4,341/oz
The most bullish forecast comes from Julia Du, a senior commodities strategist at ICBC Standard Bank, who sees gold prices pushing as high as $7,150 .
"Gold remains the headline story after a record-breaking 2025," the London Bullion Market Association said in its annual forecast survey, citing expectations of lower US real rates, continued Federal Reserve easing, and sustained central bank diversification away from the dollar .
The World Gold Council's 2026 outlook projects gold could rise another 5-15% from current levels depending on economic conditions, with central bank buying and potential new investor categories—such as Chinese insurance companies and Indian pension funds—providing structural support .
What's Driving the Rally Today
Several factors converged to push gold above $4,800 on Wednesday:
Greenland Tensions: President Trump's continued push to acquire Greenland—and his threats to impose tariffs on NATO allies who oppose the move—have sparked a flight to safety .
Fed Independence Concerns: The US Supreme Court is hearing Trump's unprecedented attempt to fire Federal Reserve Governor Lisa Cook, raising questions about central bank independence .
Rate Cut Expectations: The Fed is expected to hold rates through at least March, but markets continue to price in easing later in the year. Lower rates reduce the opportunity cost of holding non-yielding gold .
Dollar Weakness: The US Dollar Index fell more than 10% in 2025—its worst year in three decades—making gold cheaper for foreign buyers .
"There's a bit of fear of missing out on this trade," said RJO Futures senior market strategist Bob Haberkorn. "Given the geopolitical situation in the world, it's a perfect storm for higher gold and higher silver prices right now" .
Ask Fintool AI AgentSilver Also Surges
Silver isn't being left behind. The metal climbed toward $94 per ounce on Wednesday, near its all-time high of $95.87 set the previous day .
"Silver's rise to a three-digit number is looking quite possible given the price momentum we are seeing," said Soni Kumari, ANZ commodity strategist, though she cautioned volatility could increase .
Citigroup has forecast silver at $100 by March, driven by its dual role as both a precious metal and industrial commodity—particularly in solar panels and electronics .
What to Watch
Near-term risks:
- Profit-taking after an extended rally could trigger sharp pullbacks
- Any de-escalation of geopolitical tensions (Greenland, tariffs) could reduce safe-haven demand
- Stronger-than-expected US economic data could delay Fed rate cuts
Structural catalysts:
- Continued central bank diversification away from dollar assets
- Potential regulatory changes allowing commercial banks to hold gold as reserves
- Chinese insurance companies' new ability to allocate up to 1% of assets to gold—equivalent to approximately $27 billion
Key levels:
- $5,000/oz represents the next major psychological barrier
- A sustained break above $5,000 could trigger momentum buying toward analyst targets of $6,000+
For investors, the message from central banks is clear: in a world of geopolitical uncertainty, fiscal deficits, and fiat currency concerns, gold has reclaimed its status as the ultimate store of value. After 30 years playing second fiddle to US Treasuries, the "barbarous relic" is back on top.
Related: