Although central banks across the globe have kept increASIng their gold holdings in recent years, a Federal Reserve economist argues that directly comparing the market value of gold in global official reserves with foreign‑official‑held U.S. Treasury securities can yield misleading conclusions. Colin Weiss, Chief Economist for Global Financial Flows at the Federal Reserve, points out that the sharp run‑up in gold prices has been driven mainly by private‑sector demand, and most of the world’s official gold reserves remain in the hands of nations that have barely added to their gold holdings for more than 50 years.
In a FEDS Note published on Thursday, Weiss wrote that gold‑denominated holdings within global international reserves exceeded foreign‑official‑held U.S. Treasury securities in 2025, drawing attention from media outlets and policymakers. Yet he stressed this does not mean gold has surpassed U.S. Treasuries in attractiveness as a reserve asset, because structural flaws exist in such a direct comparison.
Gold Price Gains Driven Largely by Private‑Sector Demand
According to Weiss, the rising market value of global gold reserves since 2024 stems not from massive central‑bank gold purchases, but from higher gold prices fuelled by surging private‑sector demand. He notes central banks did ramp up gold buying notably in 2022 and have maintained elevated purchase volumes afterwards. It was the jump in demand from private investors, reflected by inflows into physical‑gold‑backed exchange‑traded funds (ETFs), that sent gold sharply higher again toward the end of 2024.
He states that while both official and private investors contributed to gold’s spectacular rally in 2025, official‑sector demand alone could not have delivered such large price gains. This means the rising market value of gold reserves reflects valuation shifts far more than a commensurate material shift in central‑bank reserve allocations.
U.S. Gold Reserves Magnify the Comparison Gap
Weiss also specifically warns that statistical scope amplifies gold’s apparent weight. Data for foreign‑official‑held U.S. Treasuries exclude Federal Reserve holdings, whereas global gold‑reserve statistics include gold owned by the U.S. government. As the world’s largest gold holder with roughly 22% of global stocks, the United States makes “global gold reserves” look considerably larger relative to “foreign‑official‑held U.S. Treasuries”.
He points out that excluding U.S. gold reserves would lower the market value of global gold reserves by $80 billion‑$1100 billion across most of 2025. At end‑2025, global gold reserves reached $5.1 trillion in market value; even stripping out U.S. holdings, the figure stood at $4 trillion, still above the $3.9 trillion of foreign‑official‑held U.S. Treasuries. Nevertheless, Weiss emphASIzes this edge comes chiefly from valuation changes rather than a pronounced jump in central‑bank gold accumulation over the prior 18 months.
By June 2026, foreign‑official‑held U.S. Treasuries once again surpassed non‑U.S. global gold reserves in dollar terms, even as physical gold reserves measured in troy ounces kept rising. For Weiss, this demonstrates that U.S. Treasuries have not genuinely been displaced by gold in actual official‑reserve allocation structures.
Bretton Woods Legacy Still Holds Sway
In Weiss’s view, most gold held by global central banks is not the product of deliberate, strategic portfolio rotation away from dollar assets toward gold; instead, it represents a historical legacy inherited from the Bretton Woods era. He observes that although many emerging‑market central banks have added gold since 2008, the bulk of today’s global gold reserves were accumulated before the de‑facto collapse of Bretton Woods in 1971. By contrast, most foreign‑official‑held U.S. Treasuries were built up after 2000.
He also notes that countries holding large gold reserves are often not the same nations with massive foreign‑exchange reserves. In 2026, the share of countries making active discretionary choices between gold and U.S. Treasuries within total global gold stocks remains limited.
Weiss lists the world’s top five gold holders — the United States, Germany, Italy, France and the International Monetary Fund (IMF) — which together account for roughly 52% of current global gold reserves. These entities have barely undertaken large‑scale gold purchases since the 1970s. Meanwhile, the U.S., Germany, France and Italy do not hold large foreign‑exchange reserve buffers, so gold makes up over 80 percent of their international reserves at prevailing market prices.
U.S. Treasuries Remain a Key Component of Reserve Portfolios
Weiss states that even beyond the top‑five gold holders, U.S. Treasuries represent a larger share of international‑reserve portfolios than gold. By June 2026, foreign‑official‑held U.S. Treasuries still exceeded gold reserves by approximately $1 trillion, despite valuation‑driven narrowing of the gap over the preceding twelve months.
Still, he cautions that such comparisons can overstate or understate real differentials. On one hand, substantial official‑sector gold purchases after 2021 may not show up in official IMF statistics. On the other hand, true foreign‑official Treasury holdings could exceed figures published in the U.S. Treasury International Capital (TIC) report, as some official investors hold Treasuries via non‑U.S. custodians.
Even incorporating extra official‑sector buying estimated by the World Gold Council from 2022 onward, Weiss says foreign‑official holdings of U.S. Treasuries are still about $600 billion larger than official gold holdings when excluding the United States, Germany, France, Italy and the IMF.
Weiss concludes that official‑sector investors have been net buyers of gold since 2008, and accumulation likely accelerated markedly after 2022. Some of those purchases may reflect geopolitical considerations such as ideological alignment with the United States or concerns over financial sanctions. Even so, foreign‑official investors remained net buyers of nearly $200 billion worth of U.S. Treasuries between 2022 and April 2026, confirming Treasuries’ continued importance within reserve‑asset mixes.
From a market perspective, the research reminds investors that gold prices do not move in simple lockstep with central‑bank reserve behaviour. Gold rallies are frequently driven by private capital flows, ETF inflows and macro safe‑haven demand. As one of the world’s core reserve assets, U.S. Treasuries cannot be fully replaced by any single asset in the near term.