Central Banks’ Gold Rush: Retail Is Not in Yet

Scottsdale Mint CEO Josh Phair recently underscored a pivotal trend: Central Banks are reshaping their balance sheets and slashing their US Treasury holdings to a 22-year low of 23%. While reducing treasury positions, gold reserves are being raised to a 26-year high, potentially a total of 18% of global reserves. This swivel is driven by waning confidence in dollar-centred systems, and signals robust opportunities for gold investors, especially as retail participation has yet to begin.

Since 2010, central banks have been net gold buyers, with 2024 purchases hitting 1044.6 metric tons. Emerging economies China, India, and Poland lead this charge, motivated by geopolitical risks and US fiscal vulnerabilities. Russia’s 2022 asset freeze catalysed this shift, spotlighting gold’s immunity to sanctions and its role as a hedge against inflation and currency devaluation. With US debt topping US$35 trillion, central banks are moving to mitigate risks of dollar erosion.

Meanwhile, US Treasuries are fast losing their lustre. A 50% value drop in 30-year Treasuries since 2020 and unrealized losses of US$650 billion for banks underscore their declining appeal. BRICS nations have cut dollar reserves by 15% since 2020, redirecting capital towards gold. This price-insensitive demand from central banks establishes a strong price floor for gold, with spot prices holding above (and far exceeding) US$2,600 per ounce since the start of 2025.

For bullion investors, the bell is tolling. Central banks’ aggressive accumulation coupled with lag time in retail investors’ -global ETF inflows remain 20% below 2020 peaks - suggests significant upside potential. Retail reluctance driven by all-time high entry costs and equity market allure, leaves room for a demand surge as economic uncertainties continue to escalate. Gold’s historical outperformance during monetary instability positions it as ‘the’ strategic portfolio mainstay.

Bullion investors should consider physical bullion or Ainslie’s digital AUS token – each backed by 1 gram of physical gold in our vaults -  a balance of liquidity and storage costs. If we didn’t need more clarity - central banking reshaping their balance sheets only reaffirms bullion’s enduring role as a safe-haven asset, with the impending retail entry poised to amplify price strength.