The Return of the ‘Barbarous Relic’: Gold Becomes the World’s No. 2 Reserve Asset

Gold has quietly overtaken the euro to become the second-largest component of global foreign exchange reserves.

While the US dollar and US Treasuries still dominate, their share has been steadily shrinking as gold’s role expands. Central banks now hold gold at roughly 20% of their reserves, compared to the euro’s 16%—levels not seen since the days of the gold standard.

This shift is no short-term blip. It’s a megatrend with enormous implications that investors cannot afford to ignore.

A recent World Gold Council survey of 57 central banks found that the main reason they hold gold is its role as a long-term store of value and a proven hedge…

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