For the first time since 1996, central banks around the world are holding more gold than US government bonds. The share of gold in total official foreign exchange reserves reached 27% at the end of 2025, surpassing both the euro at 15% and US Treasuries at 22%. Gold, put simply, is now the single largest component of global official reserves.

This looks like a big shift. But does it point to “de-dollarization”? Not according to the IMF’s own numbers.

The IMF’s own Currency Composition of Official Foreign Exchange Reserves (COFER) data, published on July 1, 2026, makes this point directly. The share of US dollar holdings in foreign exchange reserves actually increased to 57.13% in 2026Q1, up from 56.42% in 2025Q4.

According to the IMF, gold overtaking US Treasuries in 2025 was driven almost entirely by gold’s rising price, not by central banks moving money out of dollars. This isn’t reflected in COFER’s dollar share, which has stayed broadly stable. Roughly half of this quarter’s rise in the dollar’s share came simply from the dollar strengthening against other major currencies.

After falling more than 10% in 2025, the US Dollar index has regained its strength and is up nearly 2% in the last year.

ALSO READ

What It Means

Central banks now hold more gold than US government bonds or euros in their foreign exchange reserves. Gold, in other words, is now the single largest component of global official reserves. But while gold was overtaking Treasuries in headline terms, the dollar was quietly climbing in the IMF’s own reserve-currency ledger.

Gold prices surged by around 65% in 2025 and 25% in 2024. A price rally that dramatic will mechanically inflate gold’s share of total reserves, even if a central bank didn’t buy a single additional tonne.

ALSO READ

So Why Are Central Banks Still Buying?

Here’s where it gets interesting. Even with gold prices under pressure and up just 2.5% year to date, sentiment among central bankers hasn’t cooled off after a 65% return in 2025.

The numbers behind that conviction are hard to ignore. Central banks have added an average of 1,000 tonnes of gold a year over the past four years, roughly double the 500-tonne average of the preceding decade.

Central banks bought 51t of gold in June, with Poland and China continuing to lead gold accumulation. As of H1 2026, reported central bank buying reached 102t, with purchases spread across a broad cohort of emerging market central banks, according to recent data from the World Gold Council. Closer home, the RBI’s gold stock stood at 880.52 tonnes as of March 31, 2026, and had not moved as of August 31.

The World Gold Council’s Central Bank Gold Reserves Survey 2026, with most responses collected after the Middle East conflict began, found that 84% of central banks believe gold will hold a moderately or significantly higher share of total reserves five years from now, up from 76% last year. 89% believe official gold reserves will keep rising. Only 11% think gold’s share will stay unchanged, up from 5% last year.

When asked why they hold gold at all, 90% of central banks pointed to its performance during crises, 84% cited its role as a store of value, and 83% valued it as a portfolio diversifier.

Where The ECB Draws The Line

Not everyone reads gold’s rise as a permanent realignment. European Central Bank President Christine Lagarde recently laid out her reservations in unusually direct terms.

“Going forward, gold faces limitations as an official reserve asset compared with the major fiat currencies: its price is volatile, it is not remunerated, and, when held in physical form, it is costly to store. More importantly, the supply of gold is not fully elastic and does not adjust seamlessly to shifts in international demand for liquidity,” wrote Lagarde.

The Bottom Line

It’s a pointed contrast. Where the World Gold Council’s survey shows central banks growing more confident in gold year after year, the ECB’s own chief is flagging the structural weaknesses, namely volatility, no yield, storage costs, and supply that doesn’t adjust easily, that make gold a harder asset to lean on at scale.

The IMF’s data, meanwhile, sits somewhere in between: it doesn’t take a position on gold’s merits, but its numbers quietly undercut the de-dollarization effect or the “dollar is losing” narrative that gold’s rise seemed to confirm.

Disclaimer: This article is for general informational purposes only and does not constitute investment, financial, or trading advice. Gold prices are subject to significant market volatility. Past trends in central bank gold buying are not indicative of future behaviour or gold price movements. Readers are strongly advised to consult a SEBI-registered investment advisor or qualified financial professional before making any gold-related investment decisions.