Gold Overtakes US Treasuries & 89% of Central Banks Expect Higher Gold Reserves

• Gold has overtaken US Treasuries as the world's largest reserve asset, according to the World Gold Council's 2026 Central Bank Gold Reserves Survey, which found that 89% of responding central banks expect global gold holdings to increase over the next 12 months.
• Central banks have purchased an average of 1,000 tonnes of gold per year over the past four years, providing steady demand that supports long-run gold price assumptions used in mine valuations.
• Higher long-run gold price assumptions in feasibility studies increase net present value without changing a project's grade, scale, or cost structure.
• Stronger gold price assumptions improve financing conditions for development-stage projects by increasing projected project returns.
• Development-stage gold companies in Nevada, Wyoming, British Columbia, Newfoundland and Labrador, South Australia, and Brazil are making financing and development decisions based on long-run gold price assumptions rather than short-term interest rate movements.

Spot gold has fallen about 27% from its January 2026 record high of $5,589 per ounce as hawkish Fed policy under Chair Kevin Warsh and the partial unwinding of geopolitical risk premiums following the US-Iran ceasefire weighed on prices. Paper-market prices continue to reflect higher real yields and a US dollar at a 13-month high. By contrast, development-stage gold projects are valued using long-run gold price assumptions rather than the daily spot price. Those assumptions increasingly reflect continued central bank demand.

The World Gold Council's 2026 Central Bank Gold Reserves Survey confirmed that gold has surpassed US Treasuries as the world's largest reserve asset. Among the 76 central banks surveyed, 89% expect global gold reserves to increase over the next 12 months, while 74% anticipate lower US dollar holdings over the next five years. These findings support higher long-run gold price assumptions used in project valuations.

Reserve Demand Reshapes Global Gold Markets

Central banks have purchased an average of 1,000 tonnes of gold per year over the past four years, more than double the 500-tonne average of the preceding decade. The WGC survey found that 84% of respondents now view gold as a long-term store of value, while only 46% cited historical legacy as a reason for holding it, down from 62% in 2025.

Reserve Security Drives Central Bank Gold Buying

The shift reflects a reassessment of US dollar reserve assets after the post-2022 freezing of central bank reserves increased concerns about sovereign asset security. Central banks are increasing gold holdings because gold carries no credit, counterparty, duration, or confiscation risk. Among the 76 respondents, 74% expect US dollar holdings in global reserves to decline over the next five years, with gold identified as the primary beneficiary of that reallocation. The survey also found that 9% of respondents increased domestic gold storage in the past 12 months, up from 5% a year earlier, while 10% diversified overseas storage locations, up from 2%.

Long-Run Gold Price Assumptions Reshape Gold Project Valuations

Development-stage gold projects are valued using long-run gold price assumptions rather than today's spot price. Continued central bank buying supports higher long-run gold price assumptions, improving the economics of development-stage gold projects even when spot prices weaken. Higher long-run gold price assumptions increase a project's base-case NPV, improve projected cash flows, and strengthen the commercial case for financing and development.

Higher Gold Prices Increase Project Value 

Hycroft Mining Holding Corporation's June 2026 S-K 1300 Technical Report Summary illustrates how higher long-run gold price assumptions affect project value. At base case prices of $3,600 per ounce for gold and $48 per ounce for silver, the project delivers a post-tax NPV5 of $4.344 billion, a 16.9% IRR, and a 4.7-year payback period. At May 25, 2026 spot prices, the post-tax NPV5 increases to $10.0 billion, the IRR rises to 30.1%, and payback falls to 2.9 years. Every $100 per ounce increase in the gold price adds $300 million to post-tax NPV5 over the project's 51-year mine life.

Diane Garrett, President and Chief Executive Officer of Hycroft Mining, highlights the resilience of long-term gold market fundamentals:

"We know that the fundamentals have not changed for silver or for gold. When you see a pullback and then it rallies again beyond that, it gives everybody confidence that this bull market is here for a long time."

Large Gold Deposits Benefit From Higher Gold Prices

Tudor Gold's Treaty Creek Project in British Columbia's Golden Triangle hosts Indicated Mineral Resources of 24.9 million ounces of gold at 0.85 grams per tonne across 912.3 million tonnes, making it one of Canada's largest undeveloped gold deposits. The company is preparing its first Preliminary Economic Assessment for an underground mine scenario.

Joe Ovsenek, President and Chief Executive Officer of Tudor Gold, discusses capital availability for quality gold projects:

"I can't have a conversation about gold without mentioning the fact it's nearly $4,000 today. If you have a good asset, we have a great asset. So the money is there."

Financing Improves as Gold Project Economics Strengthen

Financing has historically been one of the biggest challenges facing gold projects. Higher long-run gold price assumptions improve project economics and strengthen the case for project financing. Streaming companies and royalty providers evaluate long-term cash flow projections when financing projects.

Earlier Cash Flow Supports Project Growth

New Found Gold is advancing the Hammerdown Gold Project in Newfoundland and Labrador toward commercial production targeted for the second half of 2026. The Pine Cove Mill is averaging 87% gold recovery and peak throughput of 1,394 tonnes per day, nearly double the Preliminary Economic Assessment design criterion of 700 tonnes per day. The February 2026 PEA outlines annual production of 20,000 to 25,000 ounces of gold at an all-in sustaining cost of approximately US$2,500 per ounce. The company is fully funded, with cornerstone backing from a gold-focused investor. 

Keith Boyle, Chief Executive Officer, explains how earlier cash flow funds future growth:

"By acquiring the Hammerdown assets and the Pine Cove mill, we brought Queensway forward by about three years, allowing us to generate production and cash flow sooner, limit shareholder dilution, and use that cash flow for new discoveries."

Feasibility-Stage Projects Gain Value as Gold Prices Rise

P2 Gold is advancing the Gabbs gold-copper project on Nevada's Walker Lane Trend, targeting an updated mineral resource estimate in Q3 2026 and completion of a feasibility study in Q4 2026. The October 2025 PEA outlined average annual production of 109,000 ounces of gold and 33 million pounds of copper over a 14.2-year mine life. The feasibility study is evaluating a higher-throughput scenario targeting annual gold production of 150,000 ounces.

Joseph Ovsenek, President and Chief Executive Officer of P2 Gold, explains the project's sensitivity to gold prices:

"This project is very robust at low metal prices and kicks off a lot of cash as the gold price goes up. At spot prices, we had 108% IRR, NPV15 was roughly $1.5 billion, and the NPV5 at a 5% discount rate was close to $3.5 billion."

Gold Project Development Gains Momentum as Prices Rise

Higher long-run gold price assumptions influence both project valuations and development planning. Continued central bank demand supports those assumptions, improving the economics of feasibility studies, drilling programs, and permitting decisions. Higher long-run gold price assumptions can also support earlier investment decisions for projects approaching development.

Development Projects Expand as Gold Prices Improve

U.S. Gold Corp. is advancing its fully permitted CK Gold Project in southeast Wyoming following completion of its Feasibility Study. The project has a completed economic study and the company is continuing resource expansion to evaluate additional mineralization beyond the current mine plan.

Luke Norman, Chairman of ., highlights U.S. Gold Corp's leverage to higher gold prices:

"We have tremendous leverage to the price of gold, even at $4,500 gold, you're dealing with a $1.4 billion NPV and an IRR of just under 50%. Realistically, $4,500 gold is where we're looking right now, and below spot."

Cabral Gold is targeting commercial production at its Cuiú Cuiú Gold District in Brazil in Q4 2026 while continuing exploration. Construction was 70% complete at the end of April 2026, with mining scheduled to begin by the end of June. Recent drilling at the Mutum target returned 20.7 meters grading 1.6 grams per tonne gold from 131.4 meters, including 2.5 meters grading 5.7 grams per tonne gold. The results identified a new mineralized zone that could add to the Phase 1 Preliminary Feasibility Study.

Alan Carter, President and Chief Executive Officer of Cabral Gold, emphasizes the project's strong operating margins: 

"The all-in sustaining cost that we got out of the study was just over $1,200 US an ounce. Fuel prices are probably going to push that up perhaps by $100 an ounce. But there's still a healthy margin at today's gold price. We still expect to make about $3,000 US an ounce that we produce."

Early-Stage Porphyry Projects Gain Value as Gold Prices Rise

Cobra Resources is drilling up to 1,800 meters at the Manna Hill Project in South Australia to test the depth of its gold-bearing porphyry system. Historical drilling at the Blue Rose prospect returned 48 meters grading 1.01 grams per tonne gold and 0.8% copper. Drilling in 2026 confirmed down-dip continuity, with a hole returning 74 meters grading 0.25 grams per tonne gold.

Rupert Verco, Managing Director, outlines Cobra Resources' economic potential:

"In this gold market, having 0.25 grams gold and comparing that to the porphyries in South America, this is looking pretty encouraging. We're ticking all the right economic boxes in terms of broad widths of mineralization, very strong grades, and very shallow."

Central Bank Demand Changes Gold Project Economics

Near-term gold prices remain under pressure. The federal funds rate remains at 3.50% to 3.75%, nine of eighteen Federal Open Market Committee members projected at least one additional rate hike on June 17, 2026, and the CME FedWatch Tool assigns a roughly 62% probability of a September rate increase. The US Dollar Index reached a 13-month high following the FOMC decision, while gold recorded its fourth consecutive weekly decline by the end of June.

The long-run economics of development-stage gold projects are influenced more by long-term gold price assumptions than by today's federal funds rate or US Dollar Index. Central banks continued buying gold through the 2022-2023 rate-hike cycle. The World Gold Council's 2026 Central Bank Gold Reserves Survey found that most responding central banks expect gold reserves to continue increasing.

The Investment Thesis for Gold

• The WGC survey found that 89% of responding central banks expect global gold reserves to increase, while 74% anticipate lower US dollar holdings over the next five years. Continued central bank demand supports higher long-run gold price assumptions, which can increase project NPVs without requiring higher spot gold prices today.
• Large-scale, bulk-tonnage projects with multi-decade mine lives rely on long-run gold price assumptions to support financing decisions. Projects that use base-case gold prices below current spot levels may offer greater upside if long-run gold prices remain elevated.
• Companies with completed technical studies, defined resources, and advancing development milestones are better positioned to attract financing as long-run gold price assumptions improve.
• Exploration-stage companies advancing from preliminary economic assessments to feasibility studies can benefit from higher long-run gold price assumptions.
• Higher interest rate expectations continue to weigh on near-term gold prices, but development-stage financing decisions rely primarily on long-run gold price assumptions rather than daily market movements.
• The base-case gold price used in economic studies is a key input to project valuation. Projects that use base-case gold prices well below current spot levels may have greater valuation upside if long-run gold prices remain above those assumptions.

Gold's rise above US Treasuries as the world's largest reserve asset has implications beyond short-term market sentiment. Greater central bank ownership of gold supports the long-run gold price assumptions used to evaluate and finance development-stage projects. Higher interest rates may continue to pressure near-term gold prices, but the World Gold Council's 2026 survey found that 89% of responding central banks expect global gold reserves to increase over the next 12 months. The base-case gold price used in technical studies remains a key measure of project valuation.

TL;DR

Gold has overtaken US Treasuries as the world's largest reserve asset, with the World Gold Council's 2026 survey showing that 89% of responding central banks expect gold reserves to increase over the next 12 months. Although higher interest rates continue to pressure spot gold prices, development-stage projects are valued using long-run gold price assumptions rather than daily market prices. Continued official-sector demand supports those assumptions, improving project NPVs, financing conditions, and development decisions. Companies with advanced technical studies, defined resources, and projects moving toward production may benefit most if long-run gold price assumptions remain above the conservative base-case prices used in economic studies.

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