Gold Surpasses the Euro to Become the "Second Key Currency" - How the Global Money Map is Changing

1. Overview of the Incident—The Shock of "Gold = 20%, Euro = 16%"

The ECB report dated June 11 indicated a historic turning point where, for the first time since the collapse of the gold standard in 1971, "gold" surpassed major fiat currencies to become the world's second-largest reserve asset. In market price terms, gold accounted for 20% of foreign exchange reserves, while the euro fell to 16%. The dollar remains in the lead at 46%, but its decline from over 70% in the early 2000s is evident. ft.comft.com

2. Why Are Central Banks Buying Gold Now?

• Avoiding Sanction Risks: The freezing of Russian assets in 2022 shook the myth of "U.S. dollar-denominated bonds = safety," bringing gold, which has high sanction resistance, into the spotlight.

• Mismatch of Inflation and Interest Rates: Even with positive real interest rates, gold prices rose by 30%, highlighting demand for gold as a "geopolitical hedge" rather than an "inflation hedge." wsj.com

• Emerging Markets Leading the Purchases: The People's Bank of China has been increasing its gold reserves for 17 consecutive months, followed by India, Turkey, and Poland. The official purchase volume in 2024 is expected to exceed 1,000 tons for the third consecutive year, reaching the highest level in half a century. bloomberg.com

3. Current State of the Gold Market—Prices, Supply and Demand, ETF Trends

While maintaining a record high around $2,700 per troy ounce (approximately 430,000 yen), ETF balances are actually on a declining trend. This indicates a polarization where "Western individual investors are selling, and government entities are buying." On the supply side, an increase in recycled gold circulation and the reactivation of mining investments are expected, but environmental regulations may delay the development of new mines. seekingalpha.com

4. How Social Media Reacted—Analysis of Japanese Timeline

Tracking "Gold World Second" on Yahoo! Real-Time Search, the financial cluster began responding one after another from around 7 a.m. The main tones are as follows.search.yahoo.co.jp

5. Implications for Japan

1. Diversification of Individual Assets

   • The benefits of holding "currency-independent assets" during a phase of yen depreciation.

   • However, even in pure gold accumulation, costs of 1-3% and storage fees or spreads need to be checked.

2. Corporate Financial Strategy

   • Incorporating gold ETFs as part of retained earnings is observed among listed companies.

   • However, fluctuations in market valuation gains and losses can easily affect the PL in accounting terms.

3. Government and Bank of Japan's Foreign Reserve Management

   • The current gold holding ratio is about 2%. To mitigate dependence on the US dollar, there is an option to increase the ratio of commodity currencies such as gold, Australian dollars, and Canadian dollars.

6. Future Scenarios and Risks

7. Checklist for Investors

• Short-term Trading or Long-term Holding: For short-term, optimize costs with CFDs or futures; for long-term, consider physical gold or savings plans.

• Currency Risk Management: Consider both yen-denominated and dollar-denominated investments.

• Portfolio Allocation: Generally, 5-10% is a guideline.

• Storage and Taxation: Bullion over 500g is subject to capital gains tax (comprehensive taxation). Linking with My Number reduces anonymity.

8. Conclusion: Gold Reflects the "Homeland Instinct of Money"

Since the 1970s, "paper promises" = fiat currencies have driven the economy. However, in the latter half of the 21st century, with increasing economic bloc formation and sanction risks, countries are re-evaluating "pure assets that are no one's liability." The fact that gold has surpassed the euro should be seen as more than just a numerical ratio; it is a "signal of the shift towards a multipolar international currency order." How Japan's households, businesses, and government will leverage the wave of "currency diversification" is now in question.

References

• Financial Times “Gold overtakes euro as global reserve asset, ECB says” ft.com

• Bloomberg “Gold rally sees it overtake euro as world’s 2nd reserve asset” bloomberg.com

• Wall Street Journal Live Coverage “Gold Is the Real Rival to the Dollar's Reserve Status” wsj.com

• Yahoo Real-time Search "Gold World No. 2 Reserve Asset" Post List search.yahoo.co.jp