The U.S. gold reserves have passed the mark of $1 trillion for the first time in history. Driven by an increcdible 44% valuation in 2025, gold as a hedge appears to be hotter than ever as governments stockpile on the precious metal. 

In an X thread, The Kobeissi Letter shed light on the immense size of American gold holdings. The nation now owns 8,100 metric tons of gold, more than Germany, China, France, and Russia combined.

The fact that the Fed is cutting rates while Core PCE inflation remains elevated at around 2.9% signals that the issue is not particularly inherent in disinflation, but rather a signal that the Fed is reacting to labor market weakness, not price stability.

And gold appears to be responding exactly to that. This week, the precious metal surpassed the price of $3,800 per ounce for the first time in history. Gold is currently trading at $3,874, reinforcing the idea that investors and governments alike are betting on a hedge.

If inflation is not going anywhere in the short-term, it makes sense that the market is pricing that it will at least remain elevated for the time being. Adding to that, 72% of CPI components are now rising faster than the Fed’s 2% target. That’s the highest share since 2022. Goods inflation is climbing again, driven by tariffs and supply chain friction. 

While the dollar saw some renewed strength after the Fed lowered rates on September 17, the U.S. Dollar Index is still down by 10.8% in the first half of 2025. 

For Bitcoin, this flight to gold as a store of value presents a unique opportunity for the digital asset. Often dubbed “digital gold,” Bitcoin reached all-time highs throughout the year. With institutions on its side this time, we’ll get to see whether the asset will be able to perform similarly to gold during these uncertain times. 

BTC was able to close the gap near the $115k level today. As of right now, Bitcoin trades at $114,168, up by 1.87% over the last 24 hours.