Gold Overtakes U.S. Treasuries in Global Reserves Amid Inflation Fears
Gold has entered uncharted territory, surging beyond $4,200 per ounce this week in a rally driven by mounting distrust in fiat currencies and a global rush for tangible assets.
The metal’s spectacular rise reflects both retail enthusiasm and a wave of central bank accumulation unseen in decades.
The Return of “Hard Money” Thinking
Across global markets, investors are turning back to the oldest store of value in the financial system. With inflation pressures persisting and central banks expected to ease policy further, gold’s appeal as a hedge has reignited. Many analysts describe this moment as a “hard money renaissance,” where physical assets once again outshine government-issued currencies.
The momentum is visible not just in prices but also in behavior. In Sydney, long lines formed outside ABC Bullion as individuals rushed to secure coins and bars. Shoppers interviewed by local media cited political instability, a weakening dollar, and fears of banking fragility as reasons to hold real gold rather than electronic balances.
Central Banks Join the Rush
While retail buyers are visibly crowding shops, the real power behind the rally comes from the world’s central banks. According to data shared by economist Mohamed El-Erian, gold now makes up more than a quarter of global central bank reserves, overtaking U.S. Treasuries for the first time in nearly 30 years.
This shift marks a profound strategic turn. Rather than relying solely on dollar-backed securities, many nations are opting to strengthen their positions in physical reserves — a move that signals both economic caution and a desire for monetary independence.
The Dollar’s Struggle and Bitcoin’s Mixed Moment
Gold’s ascent has come alongside the sharpest yearly decline in the U.S. dollar since 1973, a reflection of investors bracing for prolonged rate cuts and rising deficits. As traditional safe havens lose their luster, the market narrative has expanded to include digital counterparts such as Bitcoin, which, despite its volatility, is now among the world’s ten largest assets by market value.
Yet Bitcoin’s recent performance contrasts sharply with gold’s. After last week’s violent selloff that erased billions in crypto market capitalization, BTC slipped roughly 9%, prompting critics to argue it hasn’t yet proven its resilience as “digital gold.”
Economist Peter Schiff, long a skeptic of cryptocurrencies, seized the opportunity to declare the Bitcoin bull cycle “finished,” claiming that its decline during gold’s surge demonstrates its lack of defensive strength.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
