…just won’t go away*
Gold has become the world’s largest reserve asset, moving ahead of US government bonds, according to a European Central Bank (ECB) report.
The shift follows years of heavy buying by central banks and a steep rise in bullion prices over the past two years.
The ECB said gold accounted for 27% of global central bank reserve assets at the end of 2025.
*Keynes was referring to the gold standard which may be coming back
No, there are far more U.S. Treasuries than there is gold by face value.
That does not mean they have reserve status.
Although I’m a “gold bug” to a certain degree, the gold standard can’t return for a simple reason: The size of the economy and the quantity of real assets (goods, services, real estate, not even counting financial assets) is growing much faster than the quantity of gold due to population increase, inventions and building of real assets.
The amount of money has to grow as fast as the economy or economic growth will be suppressed.
I agree with the Federal Reserve’s (relatively recent) policy of controlling the money supply and fed funds rate to be neutral - to neither stimulate nor slow the economy.
Gold can’t respond to the need of the real economy for liquidity. But when fiat money grows faster than the economy and loses value gold serves as a store of real value and an indicator of the weakening of trust.
Wendy
Yes, the only way it could return is if gold went to $50K or $100K an ounce (or some figure that could multiply out to the current worlds’ economies). Of course, this is the Gold Bug’s dream…
Pete
Ahem
Gold Doesn’t Have a Friend in the World. And It Could Take a Minute Finding One.
Gold isn’t glittering this year, slumping into negative territory this month and falling more than 20% from its all-time high in early January.Demand for the storied yellow metal has faded as [inflation tied to the Iran war has surged. ]And the [massive run-up in tech stocks] since the end of the first quarter certainly hasn’t helped.
Gold has lost roughly 28% of its yearslong rally, which began in 2022 and lifted prices by nearly 200% into their late January peak of $5608 an ounce. The metal slipped below its 200-day moving average late last week.
“The sharp correction, driven by technical momentum selling and recently also forced long liquidation, has triggered a broad reset in investor sentiment, reflected in lower futures open interest, ETF outflows and softer physical demand,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Sure it’s up. But “up” doesn’t mean “up forever and always”. It’s possible to “buy at the top” in this asset class too, just like any other.
Original story from Barrons:
The historical chart shows that gold has followed a pattern of rise, bubble, retreat since Nixon took the U.S. off the gold standard. I still remember my father coming home after work saying, “My friend said to load up on gold at $35 an ounce because the price will soar.” Dad didn’t follow the advice.
Note that the price retreats after the mania-driven peak but never back to the previous peak. I wouldn’t be surprised if gold fell back to a stable $2,000 per ounce but I would be surprised if it fell back to $1,000 per ounce. It doesn’t matter to me because I bought my gold many years ago. I can recognize a bubble peak in gold…and in stocks. I don’t buy at peaks.
Wendy
Your Dad would still have been better off if he simply bought the S&P500.
Note, this chart is from October last year. The S&P has climbed even higher since that point while gold is about the same price.
I sold my physical gold and silver around that time. This ride has been over with. Gold and silver will be back, but we are older. Will you be alive to cash in? Cash in? USD.
Good call. I’ve kept mine as i expected it to go up forever 
If I’d have sold the gold/silver I would never have be able to spend the proceeds so i look on it as my insurance policy against the next collapse.
The US/UK/Japanese Industrial Revolution begins on Friday with the Iran deal. It leaves the US as better able to ship products than China. China will owe Iran a fee for much of its petrochemical products. China will lose its competitive edge. The US/UK/Japan ride into demand-side economics. To do so means major corporate tax rate hikes. Who is in charge is about to shift.
