Gold overtakes US dollar as reserve asset: Gold is no longer just a safe-haven investment, it’s now officially the world’s largest reserve asset, surpassing the US dollar, as per a Phemex report. This milestone reflects a growing confidence among central banks and financial institutions that gold can provide stability when global markets face uncertainty.

Gold Becomes the World’s Largest Reserve Asset: Gold’s Independence Makes It a Reliable Hedge

The shift isn’t just about numbers, it’s about strategy. Gold’s enduring value comes from its independence from any single government, making it a reliable hedge when political or economic tensions rise.

Why Central Banks Are Turning to Gold

As per a Discovery Alert report, institutional investors and central banks often turn to gold during crises, and 2025 and 2026 has been no exception. Through the first three quarters of the year, global central bank gold reserves rose by roughly 15% compared to 2024, with major buyers including China, India, Turkey, and several Middle Eastern countries.

De-Dollarization Trends Fuel Gold Purchases

Emerging economies are driving much of this demand, partly due to de-dollarization trends. These nations are reducing reliance on US dollar reserves and turning to gold as a politically neutral store of value.

BRICS Currency System and Gold’s Role

The discussions around the BRICS currency system further highlight how gold could play a central role in alternative global monetary arrangements, as per the Discovery Alert report.

Geopolitical Risks and Gold Buying

Head of Asia-Pacific and Central Banks at the World Gold Council, Shaokai Fan explained that, "Central banks have been net buyers of gold for nearly 15 years, with purchases surging in the past four years. Since 2022, they have bought over 1,000 tons annually. Last year, purchases dipped slightly below 1,000 tons for the first time since 2022," as quoted by The Chosun Daily.

Fan pointed out that, "Several factors explain this trend. One is the Russia-Ukraine war and subsequent sanctions on the Russian central bank. This made some central banks wary of political risks tied to foreign reserves. Fearing their securities or foreign currencies could be neutralized like Russia’s, many turned to gold—a physical asset not issued by any nation and movable at will," as quoted by The Chosun Daily.

Central Banks Purchase Gold for Portfolio Stability

He also highlighted that, "Some central banks purchase gold to enhance the stability and resilience of their investment portfolios amid geopolitical tensions. For instance, Poland’s central bank, the largest gold buyer among central banks, likely acts due to regional geopolitical conditions. Additionally, an underreported trend is central banks directly purchasing domestically mined gold to prevent small-scale mining gold from being sol ..

Gold as a Strategic Global Financial Asset

Overall, the rise of gold shows a clear shift in how the world manages wealth. It’s not just a hedge, it’s becoming a cornerstone of global financial strategy, trusted for stability in times of uncertainty.