Central banks are shifting their savings out of US government bonds and into gold, a warning sign for the dollar and a boost for gold holders.

• Foreign central banks have stopped reliably buying US Treasury bonds, ending decades of automatic demand.
• Gold buying by central banks is near record highs, and gold has passed everything else as the top reserve asset.
• The cause: sanctions on Venezuela, Russia, and Iran turned the dollar into a weapon, so other countries want a backup.
• Treasury Secretary Scott Bessent is issuing sanction warnings instead of immediate penalties, saying he does not want to blow up the global financial system.
• Washington is openly telling countries that fail to meet its terms they should expect to leave the dollar system.

Outlook: Expect central banks to keep stacking gold as long as sanctions stay a favorite US tool, which keeps steady pressure under gold prices and slow pressure on the dollar.