Gold has passed the euro to become the second-largest asset held by central banks around the world, according to the European Central Bank. By the end of 2024, gold made up 20% of global reserves, while the euro dropped to 16%. The US dollar remains in first place at 46%.
Central banks have been buying gold at record levels—over 1,000 tons a year since 2022—partly due to concerns about the safety of holding dollars or euros. This trend grew after Western countries froze Russia’s foreign reserves in response to its 2022 invasion of Ukraine. Some countries, especially those closer to China and Russia, have turned to gold as a safer option.
Still, gold is not widely used for trade or payments. The dollar is easy to use and accepted everywhere, backed by strong US markets. But the rise in gold buying shows that many countries are preparing for a more unstable global economy.
