Gold has overtaken the euro to become the world’s second-largest reserve asset after the US dollar, according to a new ECB report. This shift reflects gold’s 60% price surge over the past two years and massive central bank buying, with over 1,000 tonnes purchased in 2024 alone—double the previous decade’s average.
The transformation goes beyond traditional inflation hedging. Gold now serves as a geopolitical insurance policy, particularly for emerging economies seeking protection from sanctions and financial weaponization. China, Turkey, and India have led this buying spree, adding over 600 tonnes since 2021.
At current valuations, gold represents 20% of global foreign exchange reserves versus the euro’s 16%. This marks a fundamental shift in how nations view monetary security—gold is no longer just an inflation hedge but a sovereignty-preserving asset in an increasingly fragmented global financial system.