Gold is losing some of its shine
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After an astonishing run-up last year, the price of gold is moving sideways.
Why it matters: It undercuts the idea that the precious metal is a safe-haven investment during risky times.
State of play: Since the start of the war, gold has behaved less like a safe space and more like a so-called risk asset, rising on hopes that the conflict would end — and falling when fears intensify.
- So on Thursday, as markets digested news of a ceasefire between Lebanon and Israel, the price of gold ticked up slightly.
Zoom out: After jumping to more than $5,000 an ounce in mid-March, gold futures are now trading under $4,500.
The big picture: There's lots of talk now about how foreign countries are buying gold in an effort to move away from the dollar and U.S. Treasurys, as worries grow that Washington is increasingly weaponizing its currency.
Flashback: This was definitely happening from 2022-2024, as central banks were buying more than 1,000 tonnes of gold per year, up from around 600 or less in the preceding years, data released from the European Cenral Bank this week shows.
- That's because countries got spooked when the U.S. and allies froze Russian foreign exchange assets after the invasion of Ukraine — a sign that the dollar had become weaponized in a way that freaked governments out.
Reality check: But by 2025, investors started buying too — and prices soared. The price of gold surged by around 60% last year, after a 30% run-up in 2024, the ECB points out.
- Central banks dialed it back. Gold buying dipped back down in 2025, falling below 1,000 tonnes.
Where it stands: Gold has overtaken U.S. Treasurys in central bank reserves.
- Gold accounted for 27% of global reserves at the end of 2025 (up from 20% a year earlier).
- US Treasurys fell to 22% from 25%.
Yes, but: Dollar-denominated assets still represented the largest share of global reserves at 42%.
Between the lines: Before you mark the demise of America or something, keep in mind one thing: This apparent shift happened mostly because of that price surge — even though countries were buying less, the gold they already held became worth more.
- If you strip out rising prices and recalculate these numbers using the 2023 price of gold, reserves of gold were just 16%, per the ECB.
What they're saying: "It's the safe haven status of gold that's suffered," Robin Brooks of the Brookings Institution noted Thursday.
- "Gold has behaved like a high-beta asset since the war with Iran began, falling when risk aversion spikes and rallying back when it looks like there'll be a peace deal."
The bottom line: All that glitters, etc.
