Central Banks Dump Treasuries In Favor Of Gold

A discreet but historic shift has occurred in central bank reserves. For the first time in nearly 30 years, gold surpasses U.S. Treasury bonds. This adjustment, far from trivial, reflects a growing loss of confidence in U.S. sovereign debt. Behind this choice, central banks are reshaping their priorities, betting on the timeless strength of the yellow metal. This signal, almost unnoticed, could redefine the foundations of the global monetary system.

A Historic Turning Point in Central Bank Strategy

While tokenized gold surpasses the billion-dollar daily volume threshold, a data point surprised even the most seasoned analysts this October. Foreign central banks now hold more gold than U.S. Treasury bonds, a situation unprecedented since the mid-1990s.

The chart published by Barchart on October 26 confirms this symbolic but highly significant reversal. It represents a discreet yet fundamental break in reserve logic.

Foreign Central Banks now own more Gold than U.S. Treasuries for the first time in almost 30 years 🚨🚨🚨 pic.twitter.com/7wLTCux1mu

— Barchart (@Barchart) October 26, 2025

This shift is based on a particularly sustained gold buying dynamic over several years, which intensified throughout this year. Here are the main figures provided by the World Gold Council :

• 19 net tonnes bought in August 2025, after 10 tonnes in July ;

• An annual pace projecting approximately 900 tonnes of purchases in 2025, double the historical average ;

• The fourth consecutive year where purchases far exceed usual standards ;

• A trend started in 2010 : central banks have been net buyers of gold for 16 consecutive years ;

• In just six months, 23 countries have increased their gold reserves.

Central banks are buying unprecedented amounts of gold:

Global central banks have bought an annualized +830 tonnes of gold in 2025.

In the first half of 2025 alone, 23 countries increased their gold reserves.

Central banks are now on track to buy twice as much as the annual… pic.twitter.com/CPtK95R36X

— The Kobeissi Letter (@KobeissiLetter) October 25, 2025

In other words, this is not an isolated peak or a short-term tactical repositioning. It’s a deliberate, coordinated, and sustainable strategy reflecting a redefinition of gold’s role as a trust anchor in an increasingly uncertain macroeconomic context.

A Structural Shift in Monetary Confidence

Behind these accounting decisions lie deeper geopolitical and strategic choices. Macro-analyst Sunil Reddy speaks of a paradigm shift : “when these balances nearly vanished, gold skyrocketed… Capital seeks what cannot fail: strong currency. Gold is no longer just inflation protection; it becomes precious collateral, the asset of last trust.”

#Gold is doing something deeper than just reacting to inflation.

When the Fed’s reverse-repo balances — the pool where banks and funds park excess cash overnight — started collapsing toward zero, gold began to ignite.

And when those balances nearly vanished, gold went vertical.… pic.twitter.com/7BlX9YyfUC

— Macro Liquidity by Sunil Reddy (@SunilRe89392848) October 26, 2025

For him, the recent gold rise does not simply stem from an inflationary environment but from a sharp drying up of secure liquidity once embodied by Treasury bonds.

At the same time, this shift to hard assets does not go unnoticed in the crypto ecosystem. Investor and crypto analyst Lark Davis highlighted an intriguing correlation. While gold experienced a 5 % drop, its worst day since 2013, bitcoin gained 3 %.

According to him, “If BTC captures even a fraction of gold’s market cap, it could mark the start of an insane rally… 1 % equals $134,000, 3 % $188,000.”

Looks like people lining up to buy gold last week might've been the local top.

Gold is down 5% on the week.

Bitcoin’s up 3%.

Rotation starting? Maybe.

If $BTC absorbs even a fraction of gold's market cap, it could mark the beginning of an insane rally:
1% = $134K
3% = $188K… pic.twitter.com/V8Q84oT568

— Lark Davis (@TheCryptoLark) October 26, 2025

Mister Crypto echoes this: “digital gold is next.” Even though the brutal gold selloff seems to have been triggered by technical mechanisms, a massive sale of ETFs triggering automatic orders, Chinese institutional investors have continued to increase their exposure. No structural withdrawal signs appear on the physical gold side.

Gold has gone absolutely parabolic.

But it’s now showing clear signs of topping out here.

DIGITAL GOLD IS NEXT! pic.twitter.com/VFjBoxWsXv

— Mister Crypto (@misterrcrypto) October 26, 2025

This shift of institutional capital toward assets considered “non-failing” could well redefine the axes of trust on which the global monetary system relies. Gold regains its status as a tangible anchor in a liquid and over-indebted world. However, while central banks reaffirm their preference for gold, individuals may soon turn to its digital equivalent. Bitcoin, still on the sidelines of these macroeconomic arbitrages, may be waiting for its moment. Far from being a mere speculative asset, it could become, for a growing portion of investors, the ultimate asset of decentralized trust that will join gold in central banks’ balance sheets.