Why are nations like India and China shifting away from US Treasuries?

What India and China are actually doing

• India - India’s US Treasury holdings fell below $200 billion, declining to ~$190 billion (Oct 2025)

• This marks a $50.7 billion drop year-on-year.

• At the same time, RBI’s gold reserves increased to 880.18 metric tonnes, up from 866.8 tonnes

• Total forex reserves stayed broadly stable at ~$685 billion

• Gold’s share in reserves rose sharply from 9.3% to 13.6% in one year.

• China - China’s US Treasury holdings fell to $682.6 billion (Nov 2025) ; the lowest since 2008

• This is part of a long, steady decline, not a one-off move.

• China’s total forex reserves remain massive at $3.35 trillion.

• Gold reserves rose to 74.15 million ounces, marking the 14th straight month of accumulation.

What this shows: India is reallocating within reserves, not shrinking them, and China is systematically reducing dollar-linked assets while strengthening reserve buffers.

Why are gold prices going up?

Gold prices are rising not just because of investors, but because central banks are persistent buyers.

Key reasons:

• No default risk: Gold is not anyone’s liability

• Protection from bond losses: Rising interest rates hurt bond prices

• Geopolitical insurance: Gold cannot be sanctioned or frozen

• Currency diversification: Reduces over-dependence on the US dollar

Key takeaway

India and China are not betting against the dollar overnight; they are building resilience for a more uncertain world. The steady move away from US Treasuries toward gold reflects a structural reset in global reserve management, one that may define this decade’s financial landscape.