Gold is having a moment—and the world’s biggest players are leading the charge.
Ainslie Bullion reported this week that Scottsdale Mint CEO Josh Phair recently highlighted a powerful trend: central banks are reducing their exposure to US government bonds and increasing their gold reserves. Their holdings of US Treasuries have dropped to the lowest level in over two decades, while gold now makes up around 18 per cent of global reserves—a 26-year high.
Why the shift?
Several factors are driving this move:
Declining trust in the US dollar and ballooning US debt (now over US$35 trillion)
Geopolitical risk, with Russia’s 2022 asset freeze reminding countries that gold can’t be sanctioned
Inflation concerns, where gold continues to act as a hedge against currency debasement
Since 2010, central banks—especially in countries like China, India, and Poland—have been consistent gold buyers. In 2024 alone, they added more than 1,040 tonnes to their holdings.
At the same time, US Treasuries have seen a steep fall, with 30-year bond values down by nearly 50 per cent since 2020 and banks sitting on hundreds of billions in unrealised losses. BRICS nations have also cut their US dollar holdings, redirecting those funds into gold.
So what does this mean for regular investors like you?
While central banks have been loading up, ‘retail’ investors—that is, everyday people like you and me who invest their own money (not institutions or governments)—have largely stayed on the sidelines. Global gold ETFs (a popular way to get gold exposure) are still down about 20 per cent from their 2020 highs. That means there’s still room for more demand—and potentially higher prices.
Experts—such as Ainslie Bullion—suggest that holding some gold, whether physical or digital, can be a smart hedge against market volatility and currency risk. Ainslie’s AUS token, backed by 1 gram of physical gold, is one easy way to get exposure without handling the metal directly.
The great news for trustees is that either approach—vaulted bullion or digital tokens—can be held inside an SMSF.
At FFSS, we look after the SMSF compliance side. So if you’d like to know more about SMSF investment options, start by having a chat to your favourite bullion merchant.
General information only; not financial advice. Please seek professional guidance before acting on this content.
