Who are the biggest gold bugs of them all? Central banks apparently.

Bullion has now overtaken U.S. Treasuries as the largest share of foreign reserves held by central banks, the European Central Bank recently confirmed.

The yellow metal’s share in official reserves rose to 27 per cent at the end of 2025, while U.S. Treasuries fell from 25 per cent to 22 per cent.

This shift in dominance says much about the state of the world. Central banks have bulked up on gold, not only for diversification, but also as a hedge against geopolitical risk, said the ECB.  The move away from Treasuries may also reflect that countries are seeking an alternative to the U.S. dollar.

“Geopolitical tensions continue to drive strong central bank demand for gold,” wrote ECB president Christine Lagarde in the report. 

Much of gold’s ascent has to do with its “epic surge” in price over the past two years, said Kieran Tompkins, an economist with Capital Economics.

Gold prices rose 30 per cent in 2024 and 60 per cent in 2025, hitting a high of US$5,500 this past January. Without that price increase, the share of bullion in central bank reserves would have been about the same as the euro and below Treasuries.

But that’s not to diminish central banks’ voracious appetite, which has in great part fuelled gold’s rally in recent years, said Tompkins.

Central banks bought more than 1,000 tonnes a year between 2022 and 2024. Purchases have since eased to about 850 tonnes as soaring prices and the rising value of holdings curbed demand, but they still remain above historic levels, said the ECB.

The world’s central banks now hold more than 36,000 tonnes of gold, almost as much as during the peak of the Bretton Woods era, when the U.S. dollar was pegged to the metal, said the Financial Times.  

Tompkins said one of the important signals of the ECB report is that central bank’s demand for gold is likely to stay strong.

“Survey evidence shows that geopolitical risks remain a key concern for many central banks and buying has been particularly concentrated among those located in regions with higher threats of conflict,” he said.

Poland topped the official sector purchases in 2025, buying about 100 tonnes, followed by Kazakhstan, Brazil, China and Turkey.

The second signal is that gold prices could fall further in the short term. The ECB report says that private investment demand for gold hit almost 2,200 tonnes in 2025 — almost double the amount the year before.

This was mostly fuelled by a record US$89 billion inflows into gold-backed exchange traded funds (ETFs), which snapped up about 800 tonnes of gold last year.

But that speculative fury is starting to unwind, said Tompkins, with gold prices falling 15 per cent since the start of the Iran war. Capital expects them to drop further from US$4,450 to US$3,500 an ounce by the end of this year.

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Nothing moves Canadian bond markets quite like jobs data, says National Bank of Canada.

Its strategists argue that the Bank of Canada should add an unemployment rate forecast to its quarterly monetary policy report like many of its central bank peers.

Their chart shows how Statistics Canada’s labour force survey is the most impactful on Canadian bond yields, even more so than Bank of Canada’s rate decisions.

U.S. jobs data is often released the same day as Canada’s and employment readings tend to be more volatile than other indicators, which both play a role, said Taylor Schleich and Warren Lovely — but fundamentally, labour markets and inflation are “inextricably linked.”

While the consumer price index tells us where inflation has been, the trajectory of the job market helps tell us where it is going, they said.

• The Global Energy Show kick offs in Calgary. Natural Resources Minister Tim Hodgson is among featured speakers.

• Today’s Data: April trade numbers for Canada and the United States, U.S. existing home sales, NFIB small business optimism for May

• Earnings: The JM Smucker Co., Casey’s General Stores Inc.

SpaceX‘s US$1.78 trillion IPO scheduled for this week and last week’s tech selloff have many investors wondering if we’ve reached the top of the technology-driven market bubble of the past several years.

Markets will always blow off steam at some point, writes the Financial Times’ Rana Foroohar.

But she argues that when you consider that not only artificial intelligence, but other sectors like energy, defence and manufacturing are growing around the world and require greater capital infusions, that maybe we are at the beginning, rather than the end, of a new investment super-cycle. Read more

Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on  one of the country’s most important sectors. Sign up here.

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.

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