Aunburdened said:
Looks like this thread could use some accurate unbiased information
https://www.federalreserve.gov/econres/notes/feds-notes/why-gold-didnt-actually-overtake-treasury-securities-as-the-worlds-favorite-reserve-asset-20260903.html
Quote:
In 2025, world international reserves held in gold surpassed foreign official holdings of U.S. Treasury securities (figure 1), a fact drawing attention from media and policymakers (Nangle, 2025; European Central Bank, 2026; Storbeck and Hook, 2026, for example). Should this be interpreted as gold overtaking U.S. Treasury securities in its appeal as a reserve asset? I argue that the answer is no, as a comparison of world gold reserves and aggregate foreign official holdings of U.S. Treasury securities is problematic for a couple reasons.2 First, the rise in the market value of gold reserves since 2024 was primarily driven by a surge in gold prices from a jump in private sector demand.3 Second, the rise in the share of gold in global reserves is mostly accounted for by a handful of countries with large legacy holdings from the Bretton Woods era that have not accumulated gold in any meaningful amount since the 1970sincluding the U.S., which cannot hold Treasury securities as international reserves.
For the rest of this forum, you'll never get good analysis of US monetary policy when the person who makes 90% of the posts on the subject is approaching the subject from what the markets and investors are thinking. Investors have their own priorities that don't dovetail with the priorities of governments.
The Dutch moving their gold to London is more about liquidity than it is about faith in the financial stability of the U.S., but you have to actually read the articles to understand that.
As someone who was a member of the COMEX in 1986 and traded thousands of contracts of Gold Futures not to mention exchange for physical (EFP) in London, it's clear that GOVERNMENTS (not just investors) place a priority on LIQUIDITY.
Many central banks, including the Dutch, spread their gold eggs in different baskets around the world to keep them safe.
New York and London are the two main centers for gold trading.
Gold bullion in London needs to conform to international market standards and is therefore regarded as the world's most easily
tradeable gold.
Physical gold that does not meet the stringent specifications that London requires has to be melted down and recast in order to qualify.
Bank of England vaults also host a lively market in lending and borrowing gold whereby the owner of the gold makes an interest rate on what is borrowed.
Investors AND Governments always place a priority on LIQUIDITY.
This is nothing new.
But this doesn't take away from the fact that
increasing geopolitical unrest has caused the Dutch Central Bank to re-evaluate how much gold is stored at the NY Fed.
The fact that they moved a considerable amount of gold out of the United States speaks volumes not just about their liquidity needs, but also how much confidence they have in the STABLE ORANGE GENIUS.
PS. The move by Central Banks to dramatically increase their gold holdings in the last couple of years is simply a rebalancing of their asset mix and a desire to diversify away from holdings of US Treasuries.
It's also a hedge against a WEAKER US DOLLAR.
Which is what Trump and Bessent have been manufacturing with their policy in order to stimulate US manufacturing.
When the US Dollar gets weak, Gold increases in price.
Treasuries go down.
If you have an Administration that is looking to send the US Dollar lower, you're going to diversify away from Treasuries and BUY GOLD.
This is Basic Econ 101.
