As China and other nations ramp up their gold purchases, the United States is sitting out the global buying spree.
The People’s Bank of China (PBoC) has added more than 300 tons of gold since 2022, lifting its official reserves to over 2,300 tons, according to Stock Market News. Gold now accounts for more than 7% of the PBoC’s foreign exchange reserves, up from just 2% two years ago.
This marks the fastest sustained accumulation by the PBoC in modern history, potentially signaling a deliberate diversification away from the dollar.
China isn’t alone. Global gold reserves have been steadily rising since the 2008 financial crisis and now stand near 35,000 tons — the highest in almost five decades, according to Federal Reserve and IMF data compiled by macro strategist Otavio Costa.
The U.S., by contrast, has stood still. Its gold holdings have dropped to their lowest level in nearly 90 years, representing just 20% of total global reserves — down from more than 50% at the peak.
“This is the defining question for the U.S. in the years ahead: How long can America afford to sit out the global rush for gold?” Costa asked, adding that policymakers may eventually be forced to rethink their stance.
America’s weakening position on hard money
Countries stockpile gold for multiple reasons: to hedge against inflation, insure against monetary debasement, and reduce reliance on the U.S.-led financial system. As more nations diversify into hard money, Washington risks losing leverage unless it strengthens its own position.
While the gold standard ended in the 1970s, bullion still anchors credibility on central bank balance sheets. It remains a trusted form of reserve insurance, which has grown more relevant under Trump.
In recent years, “nobody but foreign central banks were buying actual gold,” economist and Euro Pacific Capital CEO Peter Schiff told Kitco News. “And the reason they’re buying gold is because they’re getting rid of their dollars.”
In Schiff’s view, central banks are preparing for a future where the greenback is no longer the backbone of the global monetary system. “They are preparing for a world where the dollar is no longer the reserve currency,” he said.
The divergence between the U.S. and the rest of the world could soon widen further. The World Gold Council’s 2025 survey of global central banks found that 95% of respondents expect gold reserves to keep rising over the next year.
Dutch asset manager APG said the accumulation trend is partly driven by de-dollarization efforts spearheaded by China.
“Gold is seen as a politically neutral reserve over which no central bank has control,” APG noted. “Moreover, gold is a hedge against default because you are not dependent on a counterparty.”
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