How gold overtook U.S. Treasurys as number-one reserve asset
1 min read
The story
Gold has surpassed U.S. Treasurys as the top reserve asset held by central banks globally, reflecting a structural de-dollarization trend that has accelerated since 2022 sanctions on Russia. This regime shift creates a persistent bid under gold and a structural headwind for long-duration Treasurys, especially as central banks diversify away from dollar-denominated assets.
The case — both sides
The house read
Long GLD / short TLT pair trade — structural central-bank de-dollarization keeps a floor under gold while pressuring long-duration Treasurys.
Wrong ifA sharp U.S. recession or risk-off flight-to-quality could temporarily bid TLT even as gold rises, compressing the spread; also, the story may already be priced into gold after its 2023-2024 run to ATHs, leaving limited incremental upside on the long leg.
Published read · research, not advice