U.S. gold reserves have plummeted to their lowest level in 90 years, a stark contrast to the rest of the world’s central banks, which are accumulating the precious metal at a pace not seen in nearly half a century.
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US Gold Reserves Hit A 90-Year Low
According to Otavio Costa, a macro strategist at Crescat Capital, this divergence has pushed global gold holdings (excluding the U.S.) to a 49-year high. He asserts that it is “only a matter of time before US policymakers are forced to rethink this stance.”
This growing disparity highlights a significant shift in global finance. At one point, the United States held over 50% of the world’s gold reserves, highlights Costa.
Today, that figure has dwindled to just 20%. A chart shared by Costa reveals the dramatic decline in U.S. holdings as a percentage of total global reserves since the end of the gold standard, while other nations have been on a consistent buying spree, particularly since the 2008 Global Financial Crisis.
Central Banks Worldwide Load Up On Yellow Metal
The trend extends beyond just gold accumulation. For the first time since 1996, foreign central banks now hold a larger portion of their international reserves in gold than in U.S. Treasuries.
Costa describes this as potentially “the beginning of one of the most significant global rebalancings we've experienced in recent history.”
Nowhere Close To The Golden Fever
Despite gold prices hitting fresh record highs, a key survey of institutional investors indicates that a speculative frenzy has not yet taken hold, suggesting the rally could have more room to run.
This cautious sentiment is highlighted by data from a recent Bank of America Global Fund Manager Survey, which shows that 39% of fund managers still have zero allocation to the precious metal in their portfolios.
China Leads In Gold Accumulation
China, the world's largest gold consumer, saw its non-monetary gold imports surge to 104 tonnes in July, well above the five-year average.
Meanwhile, demand in India is anticipated to pick up with the start of the festival season. "With the auspicious beginning of Navratri starting today, domestic markets may hope to see some buying traction," said Darshan Desai, CEO of Aspect Bullion & Refinery.
He added that "ongoing global economic uncertainties are expected to provide continued support for bullion prices."
Price Action
Gold Spot US Dollar rose 0.22% to hover around $3,772.50 per ounce. Its last record high stood at $3,791.11 per ounce. It was up 25.27% in the last six months and 42.03% over the year.
Here are a few gold and gold miners linked exchange-traded funds that investors could consider investing in amid the price rally.
| Gold ETFs | YTD Performance | One Year Performance |
| Franklin Responsibly Sourced Gold ETF (NYSE:FGDL) | 41.67% | 41.16% |
| Goldman Sachs Physical Gold ETF (BATS:AAAU) | 41.35% | 41.08% |
| GraniteShares Gold Trust (NYSE:BAR) | 41.43% | 41.16% |
| VanEck Merk Gold ETF (NYSE:OUNZ) | 41.25% | 41.09% |
| SPDR Gold Trust (NYSE:GLD) | 41.17% | 40.80% |
| iShares Gold Trust (NYSE:IAU) | 41.34% | 41.01% |
| SPDR Gold MiniShares Trust (NYSE:GLDM) | 41.47% | 41.25% |
| abrdn Physical Gold Shares ETF (NYSE:SGOL) | 41.39% | 41.17% |
| iShares Gold Trust Micro (NYSE:IAUM) | 41.52% | 41.25% |
| Invesco DB Precious Metals Fund (NYSE:DBP) | 40.47% | 33.00% |
| Gold Miner ETFs | YTD Performance | One Year Performance |
| VanEck Gold Miners ETF (NYSE:GDX) | 110.05% | 79.26% |
| VanEck Junior Gold Miners ETF (NYSE:GDXJ) | 111.93% | 85.86% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Tuesday. The SPY was down 0.54% at $663.21, while the QQQ fell 0.66% to $598.20, according to Benzinga Pro data.
On Wednesday, the futures of the Dow Jones, S&P 500, and Nasdaq 100 indices were higher.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
