A US Treasury bond pays interest, sells in a second, and passes for the safest asset in the world. A gold bar pays no coupon, sleeps in a vault, and is of no daily use. And yet, at the end of 2025, for the first time since 1996, the world's central banks held more gold than Treasuries. What happened, that the metal yielding nothing should be preferred to the debt that pays? One thing, in 2022: it was understood that a Treasury bond could be frozen.
1 The day a central bank was frozen
A precedent that changed the way the world thinks about its reserves.
The founding shock
February 2022: $300 billion immobilized at a stroke
In the aftermath of the invasion of Ukraine, the G7 and the European Union froze about $300 billion of the Central Bank of Russia's foreign reserves: dollars, euros, pounds, yen, lodged with Western custodians. Overnight, a major central bank lost access to half of its reserves. The message received by all the others, above all those of non-aligned countries, was clear: reserves denominated in Western currencies are not safe; they can be frozen. That precedent set off a silent reckoning in reserve-management rooms the world over.
2 A Treasury bond is another state's debt
The key concept: the counterparty, or its absence.
Counterparty
Gold is no one's liability
Everything turns on a legal distinction. A government bond is the liability of its issuer: holding it, you are the creditor of a third party, who can freeze it, sanction it, or default. A currency is the liability of a foreign central bank; a deposit, that of a bank. Physical gold, by contrast, has no issuer: it is no one's liability. No one can "default" on gold, nor freeze it from a distance, since no third party stands between the holder and the metal. It is an asset "without counterparty". Basel's prudential rules recognize this: allocated physical gold receives a risk weight of zero, like cash, precisely because it cannot default.
3 Gold overtakes Treasuries
The central fact, in figures: a historic shift.
The reversal
A first since 1996
The movement eventually crossed a symbolic threshold. According to the European Central Bank, at the end of 2025 gold represented about 27% of central bank reserves, ahead of US Treasuries (22%) and euro holdings (15%). It is the first time since 1996 that official institutions hold more gold than US debt. Gold has become the world's second reserve asset. One crucial caveat, however: the dollar in the broad sense — deposits and securities combined — remains in the lead, at around 42%. Gold has not dethroned the dollar; it has overtaken Treasuries and the euro.
Gold, end-2025
27%
of central bank reserves (ECB), against 20% a year earlier.
US Treasuries
22%
now overtaken by gold; the broad dollar (42%) remains in the lead.
4 The central banks' quiet rush
Who is buying, how much, and the return of gold "home".
Official demand
More than a thousand tonnes a year, three years running
The figures reveal the scale of the movement. Central banks bought more than 1,000 tonnes of gold a year in 2022, 2023 and 2024, a pace without recent precedent (the average of the previous decade was under 500 tonnes), before a slight pullback to around 850 tonnes in 2025. The buyers are first and foremost emerging economies: China, Poland (the leading buyer of 2025), Turkey, India, Kazakhstan. According to the World Gold Council's 2026 survey, 45% of central banks still plan to increase their gold holdings within the year. A further sign of mistrust: many are physically repatriating their gold onto national soil, so as no longer to depend on a foreign custodian.
5 The soaring price
The market consequence, and the start of a loop.
The ascent
From $2,000 to more than $5,000 an ounce
This official demand, added to that of investors, propelled the price. From about $2,000 an ounce in 2023, gold rose beyond $5,000 in early 2026, with a peak near $5,600 in late January 2026, before easing back. The year 2025 saw records follow one another, almost one a week. A reflexive dynamic set in: fear drives buying of gold, the rising price confirms that it protects, which draws in new buyers. We will come back to this: the very loop that sustains the price is also what makes the position fragile.
6 The appeal of the neutral asset
Why "the weaponized dollar" feeds demand for an asset no one controls.
The sought-after neutrality
A refuge beyond the reach of a sovereign issuer
The underlying reason goes beyond gold itself. By imposing sanctions, by excluding banks from interbank messaging, by freezing reserves, the Western powers have turned the financial system into an instrument of pressure — what scholars call "weaponized interdependence". This mechanically feeds demand for assets perceived as "neutral", out of the reach of a sovereign issuer. The International Monetary Fund has established it: gold becomes desirable when a country is exposed to sanctions and freezes, and half of the largest annual rises in official gold since 2000 are associated with sanctions risk. Unsurprisingly, it is the countries closest to China and Russia that have most increased the share of gold in their reserves.
7 The dilemma of the asset that yields nothing
The heart of the matter: nothing comes for nothing, and gold pays no interest.
The impossible trade-off
Safety, liquidity, return: pick two of three
A reserve manager pursues three qualities that can never all be held together: safety, liquidity, and return. A Treasury bond offers the last two — it pays interest and sells instantly — but it is seizable. Gold offers the first — no one can freeze it — but it pays no coupon and is hard to mobilize in very large quantity. To hold gold is therefore to forgo the return a bond would have provided: an opportunity cost all the heavier as interest rates are high. In short, gold is an insurance, and like any insurance it has a premium: here, it is the interest one forgoes. Safety against seizure is paid for in return given up.
The paradox that defers the dilemma
One objection leaps out: the gold supposed to yield nothing has more than doubled in price since 2023. Is that not a return? No, and therein lies the whole trap. This capital gain is not a regular income; it is the fruit of a fearful consensus — everyone buys because the others buy, out of the same fear. As long as the fear lasts, the price rises and the dilemma seems to vanish. But the day it recedes, all that remains is an asset that, once again, yields nothing, and whose price can fall. The dilemma is therefore not solved by the rise: it is deferred, and pinned to the very fragility of the consensus that sustains it.
8 "No one's liability" is not "unseizable"
A first counterpoint: qualifying the myth of untouchable gold.
The nuance
One can always seize the gold one keeps at home
"No one's liability" means without the risk of a third-party issuer defaulting; it does not mean "unseizable". A state can perfectly well confiscate gold held on its territory by simple decree: the United States did so in 1933, when Executive Order 6102 compelled citizens to hand over their gold in exchange for dollars, on pain of fine and imprisonment. Likewise, gold deposited abroad, as collateral for a loan or a swap, remains freezable like any other holding. Immunity from freezing therefore exists only for gold repatriated and kept at home — at the price, precisely, of lesser usefulness, for gold immobilized in a national vault is harder to lend and to mobilize. Perfect safety is paid for in flexibility.
9 The dollar is not dethroned
A second counterpoint: gauging the event without overstating it.
The right scale
A modest diversification, not a revolution
One must guard against seeing this as the end of the dollar. Its share of global reserves remains at about 57%, and most of its recent erosion is due to exchange-rate effects — valuation, not deliberate reallocation. The Federal Reserve has shown it: accumulating gold does not, in most cases, amount to "de-dollarization", but to a "modest diversification". The dollar retains what makes a reserve currency: the depth and liquidity of its markets, network effects, the absence of a credible alternative. And gold keeps its drawbacks: it yields nothing, costs money to store and secure, remains volatile, and is of no use for day-to-day foreign-exchange intervention. The shift is real, but it is gradual and partial, not a reversal.
10 States' insurance against states
The takeaway: gold is not a bet on return, but an insurance policy.
The meaning of the movement
Protecting against a world where money can be turned into a weapon
At bottom, central banks are not buying gold to make money — it yields nothing — but so as not to depend on a third party who could freeze theirs. Gold has become again what it long was: states' insurance against states, the only reserve asset that rests on no one's promise. Its return says less about the end of the dollar than about the fear of a financial order turned battlefield, where even a foreign reserve can be turned into leverage. The dilemma remains, whole: this insurance pays no interest, and its value hangs on a shared fear. One pays for one's peace of mind in return, and bets that the others will keep on being afraid.
The compass
①
The asset that is no one's liability. A Treasury bond is a state's seizable debt; gold is no one's liability. Since the freezing of Russian reserves in 2022, gold has overtaken Treasuries in global reserves (27% against 22%), a first since 1996.
②
The dilemma of the zero yield. Safety against seizure is paid for in interest given up. The recent rise looks like a return, but it is a fearful consensus, reflexive and fragile: the dilemma is deferred, not solved.
③
Without overstating it. "No one's liability" is not "unseizable" (the 1933 decree), and the dollar (42%) remains dominant: a modest diversification, not a dethroning. This sheet sheds light on a debate; it does not constitute investment advice.
Read alongside: The insurance that blockades without a single warship, the other face of the financial weapon; and The obscure metal, the same "weaponized interdependence" seen from the side of the lever. Reference: abbreviations & acronyms (IMF, ECB, COFER).