Central banks have been gobbling up gold, adding over 1,000 tonnes to their reserves each of the last three years.
Meanwhile, they’re jettisoning dollars.
Why?
In this episode of the Money Metals Midweek Memo Podcast, host Mike Maharrey delves into the central bank gold buying phenomenon. He discusses a recent survey that indicates there is more central bank gold accumulation in the pipeline and explains the ramifications for the United States and investors.
Mike opens the show by talking about the Florida Panthers winning “the greatest trophy in sports” — the Stanley Cup.
“Without question, it is the hardest trophy to win. It is. Fight me. But be careful. I’m a hockey player.”
Mike notes that the Stanley Cup is valuable because it is made of silver.
“As far as the monetary value goes, the best estimate is that it’s worth about $650,000. The silver alone is worth a pretty penny. The Cup is made almost entirely of a silver-nickel alloy, containing approximately 459.74 troy ounces of silver. Given the current silver price, the melt value is $17,144. In comparison, the melt value of the much smaller Lombardi trophy given to the NFL champion (total weight of 7 pounds) is around $3,800. This just goes to show the value of silver!”
If you want to win the most expensive trophy in sports, you’ll need to take up soccer.
“The FIFA World Cup trophy is formed from solid 18-karat gold with a weight of over 11 pounds. The melt value of the gold itself comes in at well over $100,000, but the estimated value of the trophy is over $20 million.”
Mike says this underscores the difference between gold and silver.
“But right now, silver is catching up to gold. As of this morning, silver was holding over $37 an ounce. We’re getting really close to what I expect to be the next significant resistance level at $37.50. Once that becomes support, I expect silver to run toward its all-time high of $50 an ounce pretty quickly.”
Mike notes that https://www.moneymetals.com/news/2024/03/25/what-is-the-gold-silver-ratio-why-should-we-pay-attention-to-it-003075" rel=”noreferrer”>the gold-silver ratio has narrowed somewhat over the last two weeks, falling from as high as 103-1 to around 90-1.
“Here’s the thing, though. From a historical standpoint, a 90-1 gold-silver ratio is still really wide. That means silver is still at a discount. So, I think there are still some buying opportunities out there.”
Mike then pivots to talk about the biggest news of the week — Israel’s attack on Iran. He points out that gold got a safe-haven bid, but U.S. Treasuries did not.
“I would argue this is one of the biggest stories out there in the world of finance and economics, and it’s not getting nearly as much play as it should. I believe the falling demand for Treasuries goes hand-in-hand with de-dollarization. So many countries are worried about being over-exposed to dollars because of the way the US and the West, more generally, have used the greenback as a foreign policy billy club.”
On top of worries about the weaponization of the dollar, people are becoming increasingly concerned about America’s fiscal mess.
“It makes complete sense that the world is beginning to spurn dollars. Don’t get me wrong. I’m not saying the dollar is going to collapse tomorrow. But there is no doubt that the popularity of the greenback is waning.”
Mike underscores his point about fiscal irresponsibility by highlighting the huge May budget deficit, emphasizing that the federal government doesn’t have a revenue problem. It has a spending problem.
“It boggles my mind that when I talk about the deficits and the debt, so many people still claim it doesn’t really matter. The fact that Treasuries are no longer catching a safe haven bid is exactly why it matters. Lack of confidence in the U.S. fiscal situation will lower demand for U.S. debt. It already is. This will force interest rates on U.S. Treasuries even higher to attract investors, exacerbating the interest payment problem.”
Mike says the world understands this, and it’s exactly why central banks are ditching dollars and buying gold.
“Did you know Central banks have gobbled up over 1,000 tonnes of gold for three straight years? And most central bankers think the buying trend is going to continue. The World Gold Council does a survey of central bankers every year, and the most recent just came out. Of the 73 central banks that responded to the survey, 95 percent said they believe central bank gold reserves will increase over the next 12 months.”
Mike highlights some of the findings from the survey. He also notes that gold has overtaken the euro’s position as the second-largest reserve asset.
“But it’s not so much that gold is replacing the euro. The EU currency’s share of global reserves has remained relatively steady. Gold is usurping the dollar.”
So, why are central banks buying so much gold?
Based on the survey, they are seeking “diversification and risk mitigation.” In other words, they are trying to dodge the devaluation of the dollar and protect themselves from https://www.moneymetals.com/news/2025/03/13/the-weaponization-of-the-dollar-and-its-global-implications-003905" rel=”noreferrer”>the weaponization of the U.S. currency.
“When you stop and think about it, the reasons central banks are buying gold are the same reasons you should have gold and silver. You need real money to protect your wealth from the devaluation of fiat currencies. And you need real money that is harder for other people to control.”
That leads to the call to action: call 800-800-1865 and talk with a Money Metals precious metals specialist today and get some real money to protect your wealth.
Articles Mentioned During the Show
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https://www.moneymetals.com/news/2025/06/13/gold-overtakes-euro-as-second-largest-global-reserve-asset-004124" rel=”noreferrer”>Gold Overtakes Euro as Second-Largest Global Reserve Asset
https://www.moneymetals.com/news/2025/05/03/jim-grant-warns-of-long-term-inflation-and-a-secular-bear-market-in-bonds-004034" rel=”noreferrer”>Jim Grant warns of Long-Term Inflation and a Secular Bear Market in Bonds
