*Gold Overtakes Euro as World’s Second-Largest Reserve Asset Amid Geopolitical Shifts* Gold has surged past the euro to become the second-largest reserve asset globally by market value, according to a new report by the European Central Bank (ECB), marking a significant shift in the global financial landscape. Driven by record central bank purchases and intensifying geopolitical tensions, gold’s rise reflects a growing preference among nations—particularly in the Global South—for diversification and protection against international instability. In its annual review of the euro’s international role, the ECB revealed that global central banks boosted their gold holdings by over 1,000 tonnes in 2024—more than double the previous decade’s annual average. This brought total official gold reserves to around 36,000 tonnes, approaching levels last seen during the 1965 Bretton Woods era. “This stockpile, together with high prices, made gold the second-largest global reserve asset at market prices in 2024—after the US dollar,” the ECB said. By year-end 2024, gold represented 20% of global reserves by market value, overtaking the euro, which stood at 16%. The surge was underpinned by a nearly 30% rise in gold prices, which hit historic highs above $3,500 per troy ounce. According to the ECB, two-thirds of central banks cited diversification as the main reason for their gold purchases, while 40% said they were driven by geopolitical risk. Much of the buying came from emerging markets, especially those increasingly distancing themselves from Western political and financial influence. While the euro’s share of reserves held steady at around 20% when measured at constant exchange rates, the rally in gold prices eclipsed the single currency in terms of market value. The ECB report also highlighted rising concerns over the resilience of traditional cross-border payment systems, with some countries actively exploring alternatives. These efforts are particularly strong among nations affected by Western sanctions, Middle East conflicts, the war in Ukraine, and escalating US-China tensions. In a related development, the ECB warned that cryptocurrencies and stablecoins, especially those pegged to US Treasuries, pose growing challenges to traditional reserve currencies. Meanwhile, the US dollar’s share of global foreign exchange reserves declined slightly to 57.8%, though it remains the dominant reserve asset. The ECB's findings underscore a deepening reordering of global finance, with gold reclaiming a prominent role not seen in decades, as a multipolar world reshapes the foundations of international reserves.