That viral “gold vs U.S. Treasuries” chart is misleading. ❗
It compares gold (a reserve asset) to USTs (just one instrument inside USD-denominated FX assets). Apples 🍎 vs oranges 🍊 .
1️⃣ What are “total reserves” ❓
For simplicity: Total reserves = FX assets 🏦 (e.g., U.S. Treasuries, USD/EUR bank deposits) + gold 🪙 + SDRs 🧻 (IMF-created reserve asset that can be swapped for currency).
2️⃣ Today’s rough mix (shares of total reserves):
🪙 Gold: ~20%
💵 USD (all USD-denominated FX assets, not just Treasuries): ~46%
💶 EUR: ~16%
🧻 Other: ~18%
3️⃣ Why USTs ≠ the whole USD picture (and what’s the split?)
Within USD FX assets globally (100% = USD only):
🧻 U.S. Treasuries: ~50%
🧻 USD bank deposits: ~43%
🧻 Other (agencies/MBS, MMFs, supranationals): ~7%
4️⃣ Is the USD share in reserves collapsing like some charts suggest?
No. The Fed’s 2025 update shows the USD share of FX reserves has been roughly stable around ~58%, only ~1–2pp lower than 2021–22. If you include gold (whose price rose), the USD share of total reserves edges down a bit more—still a modest drift, not a collapse.
(Reminder: the Fed figure is FX-only; adding gold changes the denominator.)
✨ Bottom line: The chart pits gold vs USTs, not gold vs USD. Gold’s share is up mainly because gold’s price rose, and while that mechanically trims the USD share of total reserves a little, the USD’s role in reserves still remains steady.
🟠 Personal note: I do expect gold’s share to continue rising 📈 and the USD share to continue declining 📉 —but likely more slowly 🐢 than many would like.
Sources:
https://www.federalreserve.gov/econres/notes/feds-notes/the-international-role-of-the-u-s-dollar-2025-edition-20250718.html <-great report on the topic.
#CentralBankReserves #Gold #DeDollarization #SoundMoney #economics #finance #USDollar