Gold Tops Treasuries in Reserves as Europe Hunts Lithium

The ECB now says gold has passed US Treasuries as the largest single asset in global central bank reserves, with the metal at 27% of holdings. That is a slow shift years in the making, but the line crossing in mid 2026 is still a marker worth pausing on. The same week, an activist fund went after Australia’s largest gold miner and a US startup said it would drill for lithium under two German and Polish battery factories.

Gold passes Treasuries as top reserve asset

The headline number is simple. Gold reached roughly 27% of official reserves while US Treasuries fell to second place. The driver is partly price (bullion has rallied for years) and partly volume (central banks, mostly in Asia and the Middle East, kept buying through the cycle).

Sovereign reserve managers do not move fast. When they do shift, they shift in size. The pattern over the last decade is consistent: net buying every year, with the People’s Bank of China, the Reserve Bank of India, Turkey and Poland leading. The recent acceleration came after 2022, when reserve freezes made dollar assets look less like a neutral store of value to several large holders.

A few notes for context. Reserves are still dominated by USD denominated assets if you sum cash, Treasuries, agencies and deposits. The 27% gold share refers to gold’s slice of total reserves at market prices, so a rally inflates it without anyone buying a single ounce more. Still, the trend in tonnes held has also been up. Both lines moved in the same direction.

For investors the practical signal is narrower. Gold is no longer a niche hedge in the official sector. It is a strategic line on a sovereign balance sheet. That tends to put a floor under price, even if it does not tell you what spot does next week.

Elliott goes after Northern Star

Activist fund Elliott Management has built a stake in Northern Star Resources, Australia’s largest gold producer, and is pushing for a sale of the company. Northern Star is a roughly mid cap miner with production spread across Western Australia and Alaska.

The case for breaking up or selling a producer at this point in the gold cycle is the spread between operating margins (very strong at current prices) and trading multiples (still compressed versus historical averages for top tier names). Elliott has form here: it usually wants a clean catalyst like a sale, spin or capital return rather than a slow operational turnaround.

The risk is straightforward. Forced sales at the top of a commodity cycle are not always good for sellers either. If gold keeps grinding higher, holding the asset is the better trade.

US startup plans to drill for lithium under VW and BMW battery plants

Atana Elements, a US lithium developer, has acquired exploration licences in Germany and Poland and intends to drill near or under two large battery factories operated by VW and BMW. The pitch is short transport distance from rock to anode, a smaller carbon footprint and less exposure to Chinese refining capacity, which still handles the majority of battery grade lithium today.

Europe has been trying to reduce its dependence on Chinese midstream for years. The bottleneck is not just mining. It is conversion to battery grade lithium hydroxide and carbonate, where China sits on roughly 70% of global capacity. Drilling in central Europe does not solve that on its own, but it does help with the upstream supply problem if grades are economic.

Two things to watch. First, resource quality: hard rock lithium in Germany and Poland is plausible (the Erzgebirge belt is well mapped), but grades and impurities vary widely. Second, permitting: even with strong political backing, German and Polish mining permits move on multi year timelines. Investors should not price in production for this decade.

Hormuz tanker watch and the AI bond boom

A Greek tanker operator, Dynacom, has positioned six vessels near the Strait of Hormuz in case the route reopens. Dynacom has been one of the few groups to keep crossing the strait during the conflict, which gives it a head start on volume if commercial traffic returns. That is worth tracking alongside the diplomacy. Tankers do not move at headline speed, so positioning now is a small but real signal.

In credit, US convertible bond issuance is set for a record year. The structure (zero coupon paper with an embedded call option on the issuer’s stock) suits high growth tech names with rich equity multiples. Issuers raise cheap funding and investors get a long dated option on AI capex winners without paying premium directly. Convertible volume tends to spike late in a cycle, when equity feels priced and credit still hungry. Worth keeping in mind for risk pricing.

A separate but related signal: a US jury found short seller Andrew Left guilty of securities fraud. The case touches on what counts as legitimate public stock commentary versus illegal market manipulation. Independent research that takes positions before publishing will read the verdict carefully.

What to watch

• Central bank gold purchases for Q2 and Q3. If the tonnage stays elevated, the 27% reserve share is structural, not just a price effect.
• Atana Elements drill results in Germany and Poland over the next 12 to 18 months. Grades and impurities decide whether the play is real or marketing.
• Hormuz traffic data. If insurance rates fall and weekly transits rise, oil and product spreads should compress fast.
• Convertible issuance pace. A record year is fine on its own. A record year plus widening high yield spreads is the warning combination.

Gold sits at the center of all of this. It is not a story about one rally. It is reserve managers, miners, activist funds and credit markets all repricing how much of the system runs on dollar assets and how much runs on hard assets. The 27% line is one snapshot of a longer move.