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Gold passes euro as second-largest global reserve asset


Gold has surpassed the euro as the second largest asset held in global reserves, the European Central Bank said Wednesday, driven by a combination of central bank stockpiling and the blistering rally in gold prices.

The share of gold in global foreign reserves at market prices reached 20% at the end of 2024, surpassing the euro at 16%, while the U.S. dollar still led but extended a steady decline to 46% of global reserves, the ECB said in an annual assessment.

The gold price has doubled since late 2022, fueled in part by central bank purchases, which have surpassed 1,000 tons annually for the past three years, twice as fast as their average pace of purchases prior to 2022, with holdings now at levels last seen in the late 1970s.

"Gold demand for monetary reserves surged sharply in the wake of Russia's full-scale invasion of Ukraine in 2022 and has remained high," the ECB wrote in the report.

Roughly two-thirds of central banks invested in gold to diversify their holdings, while around two-fifths did so in order to hedge against geopolitical risk, the report said.

Gold futures finished flat Wednesday as financial markets weighed the implications of President Trump's announcement of a tentative trade deal with China, which reportedly includes a six-month limit on rare earth export licenses for U.S. automakers and manufacturers.

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