Gold crosses a historic milestone, Fed says 'Yeah, but...'
There’s an old saying that if you have to explain why something isn’t important, there is probably a reason people are paying attention to it.
That aphorism comes to mind after reading the Federal Reserve’s latest research note attempting to contextualize an important milestone for gold: in 2025, the value of global official gold reserves surpassed foreign official holdings of U.S. Treasury securities. This achievement was first recognized by Tavi Costa, Founder of Azuria Capital LLC exactly one year ago. Since then, gold’s success has been recognized by major financial institutions including the International Monetary Fund.
The timing of the Fed’s argument is particularly interesting, as the U.S. Treasury recently announced that it would double its purchases of longer-dated government bonds through its buyback program.
Although these purchases are not formally recognized as yield-curve control, they shouldn't be ignored. If there was sufficient private and institutional demand at the long end of the Treasury curve, the government would have no reason to step in and provide additional liquidity itself.
Against that backdrop, gold's growing prominence deserves more attention, not less.
The Fed makes some legitimate points. It argues that gold’s rise above Treasuries was driven largely by higher prices rather than a dramatic acceleration in central bank purchases. It also notes that global reserves include massive legacy holdings accumulated during the Bretton Woods era.
Those are important qualifications, but they don't make the milestone irrelevant.
Even after removing U.S. holdings, the Fed acknowledges that sovereign gold reserves were worth $4 trillion at the end of 2025, slightly more than the $3.9 trillion in Treasuries held by foreign official institutions.
More importantly, central banks continue to demonstrate through their actions that gold matters.
According to the World Gold Council's 2026 Central Bank Gold Reserves Survey, central banks have purchased an average of roughly 1,000 tonnes annually during the past four years, double the average pace of the previous decade. A record 45% of respondents said they expect to increase their own gold reserves during the next 12 months, while 89% expect global central bank gold holdings to rise.
Looking further out, 84% expect gold to represent a larger share of global reserves five years from now, while 74% expect the U.S. dollar's share to decline.
Those aren't the responses of institutions treating gold merely as a Bretton Woods relic.
None of this means the dollar is about to lose its dominant reserve-currency status. Nor does it mean Treasuries have suddenly become irrelevant. They remain among the world's deepest and most liquid financial assets.
But that isn't really the point.
The important development isn't that gold has replaced the dollar. It's that central banks increasingly see gold as a strategic monetary asset alongside—and, at the margin, instead of—traditional dollar reserves.
The Fed can explain away the technical reasons that gold surpassed Treasuries, but it shouldn't dismiss what the milestone represents. Gold has become an important monetary asset in global financial markets.
