Amid geopolitical conflicts and the shadow of global trade wars, gold is once again taking center stage in the international financial arena. The trend of central banks increasing their gold reserves continues to strengthen, with gold evolving from a traditional safe-haven asset to a core component of central bank strategic reserves. Investment Analyst Rodolfo Villani points out that this shift is gradually reflected in the asset allocation of central banks worldwide and has triggered a deep reassessment of the relationship between gold, sovereign credit, and the status of fiat currencies.
Strategic Signals from Central Bank Asset Allocation Shifts
Investment Analyst Rodolfo Villani believes that the rising status of gold in central bank reserves is not solely due to hedging needs, but rather stems from systemic concerns about the future trajectory of the US dollar. According to data from the World Gold Council, central banks have purchased over 1,000 tons of gold annually in the past three years, significantly higher than the average of 400–500 tons in the previous decade. This trend has not weakened with easing inflation or shifts in Federal Reserve policy; on the contrary, it has accelerated amid renewed uncertainty over Trump-era policies. Investment Analyst Rodolfo Villani notes that gold has become the second-largest reserve currency in the world, second only to the US dollar and surpassing the euro, and the structural signals behind this deserve close attention from investors.
In this revaluation anchored by gold, the strategic position of Italy is particularly crucial. Investment Analyst Rodolfo Villani highlights that Italy ranks third globally with official gold reserves of 2,451.83 tons, behind only the United States and Germany. This level of reserves not only strengthens the stability of the Italian central bank within the global monetary system but also provides additional fiscal credit support within the Eurozone. Given the currently high debt levels in Italy within the Eurozone, the credit buffer created by gold is of significant importance. In fact, against the backdrop of frequent US tariffs and internal growth divergence in Europe, gold gives Italy greater flexibility in fiscal and monetary policy.
Gold Reshaping the Capital Market Logic
Beyond its structural reserve advantages, the price guidance effect of gold on capital markets is also noteworthy. Investment Analyst Rodolfo Villani argues that as central banks continue to buy gold, the traditional valuation logic of gold as a non-yielding asset is being re-examined by the market. In the context of fiat currency depreciation and constrained credit expansion, gold is not only an inflation hedge but is increasingly replacing some government bonds as a safe-haven asset. This substitution has already appeared in the allocations of certain sovereign funds and institutional investors. For example, since 2024, several emerging market sovereign funds have adjusted their US dollar asset exposures, shifting part of their holdings to gold and resource-based ETF products. Investment Analyst Rodolfo Villani points out that this will continue to put pressure on traditional bond yield curves and means that the future monetary policy transmission mechanisms of European Central Bank must also consider the liquidity premium of gold assets.
In the longer term, Investment Analyst Rodolfo Villani states that the strategic restructuring of gold reserves will lead to a reordering of sovereign credit. Currently, the United States holds 8,133.46 tons of gold, accounting for 22.7% of global central bank gold reserves, but its credit is underpinned by an accelerating fiscal deficit and political polarization risks. In contrast, Germany, Italy, and France collectively hold over 7,300 tons of gold and, with the euro as a unified currency platform, possess higher reserve concentration and policy coordination. This distribution structure could provide the euro with a new basis for reserve currency bargaining power and offer external support for Italy to further enhance its international credit rating.
Investment Analyst Rodolfo Villani cautions that rising gold prices inevitably bring valuation adjustment pressures to financial assets. Especially when global risk appetite declines, there is a negative correlation between gold and high-volatility tech stocks. Once gold prices enter a structural upward channel, growth stocks and some valuation-sensitive assets may face passive sell-offs. Additionally, the gold trading market remains highly concentrated; should geopolitical tensions ease or Federal Reserve policies reverse, price volatility could increase, posing potential losses for retail investors.
In light of this revaluation cycle, Investment Analyst Rodolfo Villani advises investors to pay attention to the proportion of gold in their asset allocation and the volatility risks associated with related ETFs, while closely monitoring structural changes in central bank reserve behavior. Gold is not only a traditional safe haven but may also become a core anchor in the reshaping of the new monetary order.