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Central banks around the world now hold more gold than US Treasury securities, according to Jefferies, a development the brokerage says points to a gradual shift toward a “de facto gold standard” amid mounting concerns over America’s fiscal position and the long-term outlook for the US dollar.
In its latest GREED & Fear report, Christopher Wood, global head of equity strategy at Jefferies, argued that while gold prices may face near-term pressure from rising bond yields and expectations of tighter monetary policy, the structural case for the precious metal remains intact.
The report comes at a time when investors are increasingly questioning the sustainability of US government finances. According to Jefferies, annualised net interest payments on US debt have climbed to a record $1.03 trillion, equivalent to 19% of federal government receipts. Interest costs and entitlement spending now absorb more than 93% of government revenues, leaving little room for fiscal flexibility.
Christopher Wood argued that the political system in the US is unlikely to embrace the level of austerity required to restore fiscal balance. Instead, he expects policymakers to increasingly rely on financial repression—a set of policies designed to keep borrowing costs artificially low while allowing inflation to erode the real value of debt.
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One such measure could be yield-curve control, where central banks intervene directly in bond markets to cap interest rates. According to Jefferies, such a scenario would ultimately be negative for the dollar and supportive for gold prices.
“That process is already well under way since the world at large has already moved to a de facto gold standard as central banks continue to own more gold than Treasury bonds even after gold’s recent fall,” Wood wrote in the report.
Dollar assets
The trend reflects a broader shift in reserve management among central banks, particularly in emerging markets. Over the past several years, countries have steadily increased their gold holdings as they seek to diversify reserves and reduce dependence on dollar-denominated assets.
Geopolitical tensions, sanctions risks and concerns over the long-term purchasing power of fiat currencies have further strengthened gold’s appeal.
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At the same time, foreign demand for US government debt appears to be weakening. Jefferies highlighted that foreign investors reduced their holdings of US Treasuries by $138.4 billion in March, marking the biggest monthly decline since September 2022.
The development challenges the long-standing perception of US Treasuries as the world’s ultimate safe-haven asset.
Gold holdings
Data from the World Gold Council and IMF for the first quarter of 2026 highlights how concentrated official gold holdings remain. The United States remains the world’s largest holder of gold reserves with 8,134 tonnes, accounting for about 69% of its national reserves.
Its holdings exceed the combined reserves of Germany, Italy and France, the next three largest holders. Germany holds 3,350 tonnes, followed by Italy with 2,452 tonnes and France with 2,437 tonnes.
Russia and China each hold more than 2,300 tonnes, while India ranks eighth globally with about 880 tonnes, representing around 11% of its foreign exchange reserves. Switzerland, Japan and the Netherlands complete the top ten holders.
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Short-term pressure, long-term support
Despite its positive long-term outlook, Jefferies cautioned that gold could face near-term headwinds from elevated Treasury yields and expectations that the Federal Reserve may maintain a tighter monetary stance for longer. Rising yields typically increase the opportunity cost of holding non-interest-bearing assets such as gold.
Still, the brokerage believes corrections could offer attractive entry points for long-term investors.
Jefferies sees the lower end of gold’s current trading range at around $3,800-$4,000 an ounce and suggests that investors consider increasing exposure to gold-related assets if prices retreat toward those levels.
The report suggests that a profound shift may already be underway in the global financial system. While the dollar remains the world’s dominant reserve currency, central banks are increasingly turning to gold as a store of value, reviving a role the metal once played at the heart of the international monetary order.
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