Federal Reserve economist Colin Weiss recently challenged the narrative that global governments are abandoning the U.S. dollar in favor of gold. In a new research note, Weiss argues that the perceived shift is largely a result of market valuation spikes and legacy holdings rather than a coordinated strategic pivot.
The Role of Private Sector ETFs in the 2025 Gold Surge
A primary driver of the recent gold price spike was not central bank policy,but private investor appetite. according to the research note by Colin Weiss, the increase in the market value of gold reserves since 2024 was primarily fueled by a surge in demand from the private sector, specifically through large inflows into physical gold-backed exchange-traded funds (ETFs).
While central banks did increase their gold purchases in 2022, Weiss notes that these institutions have simply maintained that pace since then. The "spectacular rise" in gold prices seen in 2025 required a level of demand that official investors alone could not have provided. Therefore, the rising value of gold reserves reflects a market price rally rather than a mass migration of sovereign wealth away from the U.S. dollar.
How the U.S. 22% Gold Share Distorts Global Comparisons
The data often used to signal a decline in U.S. Treasury dominance is fundamentally flawed due to an accounting mismatch. As the Federal Reserve economist points out, "world gold reserves" include the holdings of the U.S. government, which owns 22 percent of the world's total gold. Conversely, the data for "foreign official holdings" of U.S. Treasury securities explicitly excludes the Federal Reserve.
This discrepancy creates a misleading picture of reerve preferences. Throughout much of 2025, excluding U.S. gold reserves would have lowered the global gold total by between $0.8 trillion and $1.1 trillion. While world gold reserves reached $5.1 trillion by the end of 2025—and ex-U .S. reserves totaled $4 trillion,surpassing the $3.9 trillion in foreign official Treasury holdings—this gap was driven by valuation changes rather than a sudden surge in central bank accumulation.
The 1971 Bretton Woods Legacy vs. Post-2000 Treasury Growth
To understand the current reserve landscape, one must look at the historical timeline of asset accumulation. Weiss describes the vast majority of global gold reserves as "accidental relics" of the Bretton Woods era, with most of these assets acquired befre 1971, the year the system effectively ended. In contrast, the bulk of foreign official holdings of U.S. Treasury securities were accumulated after 2000.
This distinction is critical because it separates legacy wealth from active strategy. The countries currently holding the largest gold reserves are often not the same countries managing the largest foreign exchange reserves. this suggests that the high volume of gold in global vaults is a reflection of 20th-century monetary history rather than a 21st-century reaction to current geopolitical tensions or economic instability.
The June 2026 Reversal and the Question of New Allocation Decisions
The volatility of market prices further undermines the theory of a permanent shift. By June 2026, foreign official holdings of U.S. Treasuries had once again surpassed world gold reserves (excluding the U.S.) in dollar terms,despite the fact that gold reserves continued to grow when measured in fine troy ounces. This flip demonstrates how sensitive the "gold vs. dollar" debate is to short-term price swings.
However, a critical question remains: which specific emerging market central banks are making new allocation decisions today? While Weiss argues that legacy holders dominate the statistics, the report does not detail the specific purchase patterns of newer gold-buyers since 2008. It remains unclear if a small but influential group of nations is building a foundation for a future system, even if their current holdings are dwarfed by Bretton Woods-era relics.
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