There are moments in financial history when the ground shifts quietly beneath our feet. No alarms. No emergency broadcasts. Just a steady change in behaviour by the institutions that matter most, and this seems to be happening a lot right now. We may be living through one of those moments now...
Over recent months, a series of developments have begun to align. On their own, each might be dismissed as noise. Taken together, they form a pattern that is becoming harder to ignore. These points below are very important.
Central Banks Are Choosing Gold Over the Dollar
For the first time in modern financial history, gold has overtaken the US dollar in central bank reserves by value.
This is not a headline driven by speculation or retail sentiment. It reflects disclosed reserve data from sovereign institutions. And it matters because central banks do not trade for profit. They hold reserves for stability, credibility, and long-term confidence.
Between 2021 and 2025, gold’s share of official reserves rose from roughly 13 percent to around 24 percent. Over the same period, the share allocated to US government debt declined from approximately 28 percent to around 23 percent.
2025 is the first year in which gold leads.
This shift is not about chasing returns. It is about trust.
Trust, Sanctions and Currency Credibility.
The freezing of sovereign reserves in recent years has changed the global perception of what constitutes a “safe” asset.
US Treasuries were long considered risk-free (Long ago...). That assumption relied on political neutrality, liquidity, and confidence in the issuing system. Sanctions introduced a new variable. Assets once thought untouchable became conditional.
Gold does not carry that risk.
It has no issuer.
No counterparty.
No political alignment.
That distinction is now being reflected in reserve policy.
China’s Strategic Pivot Away from US Debt
China provides one of the clearest examples of this re-anchoring process.
As of the latest disclosures, China’s gold reserves have risen to approximately 74.1 million ounces, an all-time high. At the same time, its holdings of US Treasuries have fallen to around $682.6 billion, the lowest level in roughly 18 years.
Since peaking in 2013, China has reduced its US Treasury exposure by over $600 billion. Over the same period, its gold reserves have more than doubled.
Image above 2011-2026
This is not a short-term trade. It is a strategic diversification away from dollar-denominated assets and towards hard, non-sovereign stores of value.
There is little to suggest this trend is slowing.
Gold, Fiat and the Question of Monetary Reset.
Prominent investors, including Ray Dalio, have openly discussed the limitations of the current fiat-based monetary system and the growing role gold may play in any future re-anchoring of global finance.
These discussions are opinions, not predictions. But they are informed by debt dynamics, fiscal sustainability, and historical precedent.
For gold to formally underpin a global reserve system again, prices would need to be significantly higher than today. Figures such as $20,000 per ounce are often cited in theoretical models, not as forecasts, but as illustrations of the scale required to rebalance global balance sheets.
What matters is not the number. It is the direction of thinking.
Supply Constraints Are Tightening, Not Expanding.
Overlay this demand shift with developments on the supply side, and the picture becomes more interesting.
For the first time in recorded history, industry data suggest that there have been zero major gold discoveries across two consecutive years. This has never occurred before.
Source: S & P Global
The same trend is visible across other metals. Major discoveries have fallen into single digits, and there are no meaningful large-scale projects currently capable of materially changing global supply in the near term.
Mining cycles are long. Underinvestment today cannot be corrected quickly tomorrow.
This suggests we may still be early in the broader commodities cycle.
A Long View of Currency Dilution.
Perspective helps.
In 1970, $1,000 invested in gold would today be worth approximately $58,000. Framed another way, the US dollar has lost around 98 percent of its purchasing power against gold over that period.
This is not an argument against currencies. It is a reminder of what fiat systems do over time, particularly when debt levels rise faster than productive growth.
The same pressures are now being discussed openly in relation to multiple Western governments, including the UK, where rising debt servicing costs, fiscal constraints, and political instability have become regular features of official commentary.
Allegations, Transparency and the Role of Confidence.
There are also claims circulating online regarding the status of US gold reserves, including unverified allegations about Fort Knox. These claims remain unproven and should be treated as speculation.
However, their existence highlights something important.
Confidence matters.
When trust in institutions weakens, even rumours gain traction. Central banks appear acutely aware of this dynamic, which may help explain why they are increasing exposure to assets that do not rely on institutional credibility to function.
What This All Really Signals...
This moment is not about fear.
It is not about inflation alone.
And it is not about short-term price movements.
It is about trust, neutrality, and durability.
Central banks are not trading headlines. They are repositioning reserves for a world that looks less stable, more fragmented, and increasingly multipolar.
If reserves are shifting quietly now, the open question is simple:
When does the wider market catch up?
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This article is for information and educational purposes only and does not constitute financial advice. All market data is based on publicly available sources at the time of writing. References to future prices, monetary systems, or policy outcomes are opinion and not guarantees. The value of gold can go down as well as up, and past performance is not a guide to future results.