The Geopolitical Reconfiguration of Reserve Assets: Gold's Rise Over Treasuries

In a world increasingly defined by fragmentation and uncertainty, central banks are rewriting the rules of global reserve management. For the first time in nearly three decades, gold has surpassed U.S. Treasury securities as the preferred reserve asset for many central banks, valued at over $3 trillion in 2025, according to a Coinotag report. This seismic shift reflects a strategic recalibration driven by geopolitical risks, inflationary pressures, and a growing skepticism toward the U.S. dollar's dominance. As nations seek to insulate their economies from the volatility of fiat currencies and the "weaponization of the dollar," gold's role as a timeless store of value is being reasserted.

Geopolitical Catalysts: From Sanctions to Strategic Diversification

The Russian invasion of Ukraine in 2022 and the subsequent Western sanctions served as a wake-up call for central banks. Overnight, the U.S. dollar's perceived invincibility was exposed as a vulnerability. According to the Coinotag report, central banks began prioritizing gold-a neutral, non-sovereign asset-as a safeguard against geopolitical shocks. This trend accelerated under the Trump administration's tariff policies, which spiked global inflation and eroded confidence in dollar-denominated assets, as noted in a Cryptopolitan analysis.

India and China exemplify this shift. India's gold reserves now exceed $100 billion, with the Reserve Bank of India doubling its holdings since 2017, according to an Economic Times report. Meanwhile, the People's Bank of China has added gold for 11 consecutive months, signaling a deliberate pivot away from dollar exposure, the Coinotag report notes. These moves are not isolated but part of a broader de-dollarization strategy, as central banks in emerging markets seek to reduce reliance on a currency that has long been both a lifeline and a lever of geopolitical power.

The Dollar's Decline and Gold's Resurgence

The U.S. dollar's relative decline has made gold more accessible. As the greenback weakened against major currencies in 2025, gold prices soared to a record $4,300 per ounce in October, the Coinotag report said. Morgan Stanley revised its 2026 forecast to $4,400 per ounce, citing central bank demand, ETF inflows, and the dollar's continued fragility, a move reported by Cryptopolitan.

However, the narrative of gold overtaking Treasuries is nuanced. Toby Nangle's analysis notes that while central bank gold holdings reached $3.86 trillion by June 2025-close to the $3.92 trillion in foreign-held U.S. Treasuries-the crossover may be more a function of gold's price surge than a fundamental reallocation, according to a Markets.com analysis. Still, the 10.5% price increase since June could push gold's value above Treasuries by October 2025, the Markets.com analysis adds. This ambiguity underscores the complexity of interpreting reserve asset trends, yet the strategic preference for gold is undeniable.

Institutional Insights: BIS, IMF, and the New Reserve Order

The Bank for International Settlements (BIS) and the International Monetary Fund (IMF) have both acknowledged gold's growing role in a fragmented monetary order. A 2025 World Gold Council survey revealed that 95% of central banks expect gold reserves to rise in the coming year, while 73% anticipate reduced dollar holdings over five years. The IMF attributes this trend to the erosion of fiscal discipline in developed economies and the overissuance of currencies, which diminish the appeal of sovereign debt, as argued in a Vancisco analysis.

Gold's unique properties-its scarcity, decentralized nature, and historical resilience-make it an ideal hedge in a world of trade wars and sanctions. As the Vancisco analysis notes, central banks are increasingly viewing gold as a "reliable and trusted asset" in an era of fiscal uncertainty. This aligns with academic research highlighting how U.S. monetary policy and geopolitical risks reinforce gold's strategic value, according to a ScienceDirect study.

The Future of Reserve Assets: Gold as a Systemic Anchor

While gold's rise is undeniable, its long-term trajectory depends on the pace of de-dollarization and the stability of global markets. The 2025 World Gold Council survey suggests that gold's share of global reserves could climb further, with 14.8% of official assets now held in gold compared to 76.18% in foreign exchange reserves, Vancisco reports. This shift is not merely a reaction to crises but a proactive strategy to diversify risk in an interconnected yet volatile world.

For investors, the implications are clear: gold is no longer a niche asset but a cornerstone of modern reserve management. As central banks continue to rebalance their portfolios, the demand for gold is likely to remain robust, supported by both macroeconomic trends and geopolitical realities.

Conclusion

The reconfiguration of reserve assets marks a pivotal moment in the global monetary system. Gold's resurgence is not a fleeting trend but a response to the structural weaknesses of a dollar-centric order. In a world where trust in fiat currencies is eroding, gold offers a timeless solution-a hedge against uncertainty and a store of value that transcends borders. As central banks navigate the complexities of the 21st century, their choices will shape not only their own futures but the trajectory of global finance itself.