For the first time since 1996, the world's central banks collectively hold more gold than US government debt. Gold: 24% of global reserves. US Treasuries: 21%. In Q4 2015, that split ran the other way: Treasuries at 33%, gold at 9%. The acceleration traces directly to February 2022, when $300 billion in Russian foreign exchange reserves were frozen overnight.
The signal was unambiguous. Assets held in another country's financial system carry political risk. Gold, held in domestic vaults, does not. The response has been consistent and sustained. Central banks purchased over 1,000 tonnes annually for 3 consecutive years. 95% of reserve managers surveyed by the World Gold Council expect holdings to keep rising. Not one indicated any intention to reduce.
The gap in the market, and what it means, is the subject of our first newsletter.