Banks Opt for Gold Over Euros – A Watershed Moment?

At the end of May 2025, European Central Bank (ECB) President Christine Lagarde spoke candidly about growing concerns in global markets regarding the long-term role of the US Dollar in underpinning the international monetary system.[1] 

‘Today, the Euro is the second global currency’ she stated. ‘The changing landscape could open the door for the Euro to play a greater international role’.

Just days later, the institution she oversees acknowledged a landmark moment. For the first time since the introduction of the Euro in 1999, gold accounts for a larger proportion of global central bank reserves than any other asset except the US Dollar. Gold, not the Euro, is now the second most important central bank reserve asset. 

The acknowledgement came in a report titled The International Role of the Euro, June 2025 [2] which also highlighted that ‘central banks worldwide now hold almost as much gold as they did in 1965 during the Bretton Woods era’ – a time when the US Dollar was directly linked to gold. [3]

According to calculations by the ECB, at the end of 2024, gold (at market value) accounted for 20% of global central bank reserves. The US Dollar stood at just 46%, while the Euro made up 16%[4]

The milestone appears to be the result of a wider trend of de-dollarisation, central banks diversifying away from the US Dollar (see our previous article Gold and De-Dollarisation: Is the US Dollar Losing Its Safe-Haven Status?).

Last week, independent research from Metals Focus, a leading precious metals consultancy, cited strong central bank demand as key reason the firm forecasts ‘further all-time records to be achieved later in the year’.[5]

At a time of uncertainty, gold continues to stand out as a trusted store of value — not just for individual investors, but for central banks around the world.

Sources

[1] https://www.bis.org/review/r250526v.htm#:~:text=Any%20change%20in%20the%20international,play%20a%20greater%20international%20role.

[2] https://www.ecb.europa.eu/press/other-publications/ire/focus/html/ecb.irebox202506_01~f93400a4aa.en.html

[3] https://www.ecb.europa.eu/press/other-publications/ire/html/ecb.ire202506.en.html

[4] ibid

[5] https://www.thearmchairtrader.com/commodities/gold-will-surge-to-new-record-highs-in-2025-says-metals-focus/

Notes 

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