According to ECB Report "Gold Becomes World’s Second‑Largest Reserve Asset After U.S. Dollar".

International

In a landmark development, gold has surpassed the euro to become the second-largest reserve asset in the world, just after the U.S. dollar, according to a European Central Bank (ECB) report on official reserve composition at the end of 2024.


      - By year-end 2024, gold accounted for 20% of global official reserves—overtaking the euro, which held 16%, while the U.S. dollar remained dominant at 46%. Other currencies collectively made up approximately 18%.

      - Central banks continued gold purchases at a record pace in 2024, acquiring over 1,000 tonnes—twice the average annual amounts of the 2010s—raising total global holdings to around 36,000 tonnes, levels not seen since the mid‑1960s Bretton Woods era.

     

Main Point :-   (i) Gold prices surged roughly 30% in 2024, reaching $3,500/oz, fueled by geopolitical tensions—especially the Russia‑Ukraine conflict—as central banks used gold to hedge against inflation, sanctions, and currency risks.

      (ii) A survey of 60 central banks revealed that nearly two-thirds adopted gold primarily for diversification, while 40% cited protection from geopolitical risks. The historic inverse correlation between gold prices and real yields broke during the 2022–24 period, reflecting gold’s rise as a geopolitical hedge.

(iii) Despite losing ground in reserves, the euro remains crucial in international finance. ECB data show that euro‑denominated debt issuance jumped over 40% in 2024—reaching the highest level since the 2008 crisis—highlighting the euro’s enduring role in global bond markets, even as central reserves shift toward gold.

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