Gold has surpassed the euro to become the world’s second-largest reserve asset by market value, according to a new report from the European Central Bank. At the end of 2024, gold accounted for approximately 20 percent of global official reserves—comprising both foreign exchange and gold holdings—edging out the euro’s 16 percent share. The shift was propelled by aggressive central bank accumulation and record-breaking gold prices, the ECB said.
Central banks purchased more than 1,000 metric tons of gold for the third consecutive year in 2024, a pace twice the average annual level of the previous decade. This buying spree pushed global central bank gold holdings to 36,000 tons, nearing the all-time high of 38,000 tons set in 1965 during the Bretton Woods era. Major buyers included Poland, Turkey, India, China, and Azerbaijan’s State Oil Fund.
Gold prices surged nearly 62 percent since the start of 2024, reaching an all-time high of $3,509.90 per troy ounce in April. The rally was fueled by geopolitical uncertainty, market volatility, and robust central bank demand. After adjusting for inflation, gold’s 2024 price levels eclipsed those seen during the 1979 oil crisis.
The ECB noted that gold demand for monetary reserves spiked sharply after Russia’s invasion of Ukraine in 2022 and remains elevated. Around two-thirds of central banks cited diversification as their motive for investing in gold, while two-fifths pointed to hedging against geopolitical risk. The United States dollar, however, continues to dominate global reserves with a 46 percent share.
Research cited by the ECB indicates that financial sanctions have driven some countries—particularly those aligned with China and Russia—to increase gold holdings. Five of the ten largest annual increases in official gold reserves since 1999 involved nations facing sanctions.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
One Response
…”nearing the all-time high of 38,000 tons”…. Then consider the unusually large physical deliveries off the COMEX since December, and a note by Goldman Sachs that China has under-reported its gold reserves by quite a bit, you don’t need a tinfoil hat to think something’s rotten in Denmark. Gold has a track record that pre-dates organized religion. The fix is in, kids.