Central banks prefer gold above euro as a world reservation

While Bitcoin (BTC) is in the spotlight worldwide after a new all-time high, a gold revolution is silent in the vaults of central banks in silence. New data shows that gold is now considered more important than the euro as a world reservation.

Gold more important than the euro for central banks

At the end of 2024, 20 percent of the worldwide currency reserves of central banks from gold consisted. This makes the precious metal the euro, which gets stuck at 16 percent, clearly surpassed. The US dollar remains the dominant currency for the time being, with a share of 46 percent.

This advance of gold is remarkable, especially in a time of raised interest rates. In principle, that would be disadvantageous for gold, since it does not result in interest. Nevertheless, we have seen a clear trend break since 2022.

Trust in Western coins is decreasing

The increased interest in gold is fed by inflation and geopolitical tensions. The war in Ukraine and the freezing of foreign reserves of Russia have shaken countries awake worldwide. This gave confidence in the Western financial system, especially that of the United States and Europe, a big dent.

According to a report from the European Central Bank (ECB), they are mainly countries with close ties with China and Russia that have considerably expanded their gold reserves. These countries want to be less dependent on politically sensitive currencies such as the dollar and the euro.

Gold price reaches new record

The demand for gold also translates directly into the market price. Since the end of 2022, the gold price has more than doubled. In the past three years, central banks have always taken more than 1,000 tonnes of gold per year. In April of this year, that led to a new record price of almost $ 3,500 per ounce.