Finshots Daily Gold is the new treasury?
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Sep 3, 2025 Central banks are now favoring gold over US Treasuries, marking a historic shift not seen in nearly thirty years. This trend is fueled by rising inflation concerns and is reshaping investment strategies. The podcast delves into how countries like India are enhancing their gold reserves to strengthen their financial stability. Gold is increasingly recognized as a vital hedge in today's uncertain economy, highlighting its strategic importance in reserve portfolios.
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Gold Overtakes Treasuries
- Central banks now hold more gold than US Treasuries because gold prices surged and they actively bought more bars.
- This shift signals a change in reserve preferences driven by value and perceived risks in bonds.
Price Surge And Heavy Buying
- Gold's price spike from $2,000 to $3,400 and fresh central bank buying boosted its reserve value sharply.
- Central banks bought over 1,000 tons in 2024 and 410 tons in H1 2025, showing serious commitment.
Treasuries Lose Their Edge
- Treasuries' appeal fell because inflation and dollar debasement erode real returns on bonds.
- If yields don't exceed long-run debasement (~4% annually), real returns can be negligible or negative.