Marker 5
Gold Will Return to a Quasi-Monetary Role in Settlement
From Appendix G
The lens suggests we should expect gold to expand from pure reserve holding to active settlement functionality—used to balance accounts between central banks that do not trust each other's currencies. This return should be driven by geopolitical fragmentation rather than by gold's physical properties.
The diagnostic logic: In a multipolar monetary order where no single currency commands universal trust, settlement between rival blocs requires a neutral asset. Gold's cultural legibility advantage—universally recognized, politically neutral, physically verifiable—makes it the natural candidate for this role. The lens identifies this not because gold is technically superior but because it is the only asset whose cultural legibility spans all major civilizational blocs simultaneously.
What to watch
The recent acceleration of central bank gold purchases through 2025, gold overtaking U.S. Treasuries as the world's largest reserve asset by value in late 2025, the inclusion of allocated gold as a Tier 1 asset under Basel III, and any bilateral or multilateral settlement mechanism that explicitly incorporates gold are all early signals consistent with this direction. Continued central bank accumulation, the formal inclusion of gold in BRICS or other bloc-level settlement arrangements, and the absence of a viable non-gold neutral settlement alternative would all reinforce the pattern.
Current read
The crossover Appendix G named as a leading indicator has happened and widened. Foreign central bank gold holdings reached approximately $4 trillion by early 2026, surpassing their roughly $3.9 trillion in US Treasury holdings—the first time since 1996 that gold has been the larger reserve asset. The gap continues to grow as the trend compounds: gold rose roughly 65% in 2025 and continued upward through Q1 2026, while Treasury holdings dipped modestly. Central bank net purchases ran above 1,000 tonnes per year for three consecutive years (2022, 2023, 2024) and added 244 tonnes in Q1 2026 alone—the seventeenth consecutive month of net purchases at price levels 81% above year-ago.
The buyer composition matters more than the headline figures. Poland led 2026 purchases on a publicly stated trajectory toward 700 tonnes; Uzbekistan, China, India, Turkey, and Brazil continue accumulating; new buyers appeared in 2026—Guatemala, Indonesia, Malaysia—that had not been net buyers in years or ever. The Bank of Korea announced in early 2026 it would begin acquiring gold via overseas-listed ETFs, its first gold-related investment since 2013. The buying is concentrated among central banks with sanctions exposure, currency volatility, or geopolitical alignment outside the Western financial perimeter—the institutions for whom dollar-denominated reserves carry counterparty risk that gold does not. This is not portfolio diversification at the margins. It is the slow reconfiguration of what central banks treat as the neutral asset.
The settlement function the marker named is beginning to materialize, though at pilot scale. In October-December 2025, the Institute of Economic Strategy of the Russian Academy of Sciences launched a research prototype called UNIT—a gold-anchored digital settlement instrument with a reserve basket of 40% physical gold and 60% BRICS national currencies. The initial pilot issued 100 Units, each backed by one gram of gold. The instrument is not yet officially adopted BRICS policy, and the New Development Bank's role as issuer remains unconfirmed. Russian Deputy Foreign Minister Sergey Ryabkov has framed full operational status as a 2030 target. The empirical reality is modest: a research-stage prototype, not a settlement network with volume. But the direction of travel matches what the marker named—gold-anchored settlement architecture explicitly engineered for cross-bloc trade outside dollar-cleared infrastructure. Whether UNIT or some successor instrument reaches operational scale is the next test.
The regulatory environment continues to lean the same direction, though more incrementally than some reporting suggests. Allocated physical gold has carried a 0% risk weight under Basel rules since 1988, including under Basel III. The proposed Level 1 HQLA reclassification—actively advocated by the LBMA and World Gold Council—has not been adopted in any major jurisdiction. What has shifted is the institutional environment around physical bullion: Basel III's stricter treatment of unallocated (paper) gold positions relative to allocated holdings, the US's July 2025 alignment with the Basel III endgame rules, and central bank policy framing that increasingly treats gold as core reserve rather than peripheral holding. Status reads as on-track. What would call this into question: a sustained reversal in central bank gold accumulation, gold's role remaining confined to reserve holding without settlement functionality scaling beyond pilots, or the emergence of a credible non-gold neutral settlement asset that fulfills the same function. None is currently visible.
Sources
Status history
- On-track
Gold/Treasuries crossover confirmed; Q1 2026 central bank purchases 244 tonnes, 17 consecutive months net positive; UNIT research prototype launched as directional signal for gold-anchored settlement architecture.
What would call this into question
Gold's role remaining purely as a reserve asset without settlement functionality, or the emergence of a non-gold neutral settlement asset—such as the SDR, a new digital instrument, or a successful BRICS commodity-basket settlement unit—that fulfills the same function. If digital alternatives prove culturally legible enough to span blocs, the lens's reading that gold's trust memory advantage is decisive would be weakened.