Gold surpasses US government bonds and Euro in foreign exchange reserves

Frankfurt (ANTARA) - Gold has become the largest component in global official foreign exchange reserves in 2025, surpassing holdings of US government bonds and the Euro as rising gold prices increase its share. This was reported by the European Central Bank (ECB) on Tuesday (2/6).

By the end of 2025, gold accounted for 27 per cent of total official foreign exchange reserves, including foreign currency reserves and gold holdings, while US government bonds accounted for 22 per cent and the Euro for 15 per cent, the ECB reported.

Data released by the ECB shows that gold purchases by global central banks surged in 2022, peaked in 2024, and subsequently slowed in 2025. Gold purchases by central banks fell to approximately 850 tonnes, below the average between 2022 and 2024, which exceeded 1,000 tonnes. Despite gold prices being at historically high levels, demand for gold remains strong.

The increase in gold’s share of official foreign exchange reserves was largely driven by price surges, according to the ECB. Gold prices surged in nominal value by 60 per cent in 2025 and 30 per cent in 2024.

In addition to diversification, central banks use gold as a hedge against geopolitical risks. However, compared to fiat currencies, gold’s status as part of foreign exchange reserves has limitations, including its price volatility, its inability to generate returns (non-remunerability), high storage costs, and its inelastic supply, the ECB report stated.