For decades, US Treasuries and gold have stood on opposite ends of the investing spectrum. Treasury bonds are seen as the world’s safest paper asset. Gold is a much maligned timeless store of wealth. But in 2025, that balance is shifting fast.
From central banks to megabanks, from European regulators to global investors, confidence in U.S. debt is evaporating. In its place? A quiet but unmistakable shift toward gold — the ultimate form of wealth insurance.
In this article we’ll break down what’s driving this change, why it matters, and how investors can respond.
Table of contents
- The Bond Market Breakdown — and Why Buyers Are Drying up
- The Growing Chorus of Concern
- What This Means for Kiwi Investors
- The End of the “Free Money” Era
- Want to See the Bigger Picture?
- China’s Quiet (But Powerful) Move from to Bonds to Gold
- Gold: The Asset with No Counterparty Risk
- Conclusion: The Shift Has Already Begun
- Frequently Asked Questions About US Treasuries, Gold, and Investor Strategy
Estimated reading time: 7 minutes
The Bond Market Breakdown — and Why Buyers Are Drying up
Chris Weber, long-time market analyst and editor of The Weber Report, believes we’ve entered a new era for interest rates. After nearly 40 years of falling rates (from 1981 to 2020), he argues the tide has turned. We’re now facing a multi-decade period of rising interest rates, with profound consequences.
Rates are climbing not because of strong economic growth, but due to stagflation — weak growth coupled with stubborn inflation (what is stagflation?). Add to that rising tariffs, geopolitical uncertainty, and massive debt issuance, and the result is a bond market in turmoil.
Megabanks like JPMorgan, Citigroup, and Bank of America — known as primary dealers — have already absorbed a record $300 billion in longer-term Treasuries, a sixfold increase since 2021. These banks play a key role in helping the US government sell its debt. But after years of accumulation, their capacity is now limited — which raises the question: who is left to buy all this debt?
The Growing Chorus of Concern
We’re not the only ones asking tough questions about bonds.
Europe’s top insurance regulator, Petra Hielkema, recently questioned whether U.S. Treasuries should still be seen as a true safe haven (Bloomberg report).
Meanwhile:
- The yield on 30-year Treasuries just experienced one of the biggest three-day spikes in 40 years (Reuters analysis).
- Over $3 trillion in U.S. debt matures this year — a serious test of market confidence and liquidity.
- Term premiums (the extra return investors demand for holding long-term bonds) are at decade highs.
- The US dollar has dropped over 4% in a single month.
The message is clear: the world is getting nervous.
What This Means for Kiwi Investors
While direct bond investing isn’t common among everyday investors in New Zealand, that doesn’t mean you’re unaffected.
📌 If you hold a KiwiSaver account, retirement fund, or managed fund — chances are, you already own bonds. In fact, many “low-risk” or “conservative” KiwiSaver funds hold a large percentage of their portfolio in fixed interest or bond assets.
So, when the global bond market hits turbulence, or long-term interest rates rise, it can directly impact your returns, even if you never consciously chose to invest in bonds.
That’s why understanding these macro shifts — and how assets like gold can provide a hedge — is just as relevant for Kiwi investors as anyone else.
The End of the “Free Money” Era
With major buyers like China backing away and megabanks already full, the U.S. is running out of options.
There are reports that the U.S. has even offered Japan a 100-year Treasury bond in exchange for security guarantees — a step we explored in more detail in our post on The Coming Global Trade Reset. This kind of desperation sends a clear signal: demand for U.S. debt is weakening.
If the private market won’t buy, and foreign nations won’t buy, who will?
The likely answer is: the Federal Reserve.
But if the Fed steps in to buy Treasuries again, that means more currency printing — a step closer to monetary inflation or even hyperinflation.
Want to See the Bigger Picture?
📺 Want to dig deeper into how traditional 60% stock/40% bond portfolios [60/40] have performed through past crises?
This short video does an excellent job visualising how lost decades tend to follow big bull runs — and why this could be repeating:
▶️ Watch: “The Lost Decades of the 60/40 Portfolio”
(Features the historical chart shown above — highlighting 100+ years of boom-bust portfolio returns.)
China’s Quiet (But Powerful) Move from to Bonds to Gold
One country has been preparing for this moment for years: China.
Since 2014, China has quietly reduced its U.S. Treasury holdings by nearly 40% — from over $1.3 trillion to around $760 billion today. At the same time, it has more than doubled its official gold reserves — from just over 1,000 tonnes to 2,292 tonnes as of March 2025, according to Kitco News.
This is not coincidence. It’s a deliberate de-dollarisation strategy — one that accelerated after the U.S. froze Russia’s dollar reserves in 2022. The message to nations like China: paper IOUs can be confiscated. Physical gold cannot.
The World Gold Council confirms that central banks globally are also increasing their gold reserves — a strong signal of what comes next.
Gold: The Asset with No Counterparty Risk
In this environment, gold is doing what it always does in times of uncertainty: rising quietly, steadily, and without fanfare. Although lately the rise has been more than just steady!
Unlike bonds, gold doesn’t rely on a promise to pay. It doesn’t need trust in a government, a central bank, or a financial system.
🌟 Gold remains the ultimate financial insurance, offering protection that doesn’t rely on any central authority. And that’s why central banks around the world — not just China — are buying more of it.
📈 In fact, gold has outperformed bonds since 2000 — and without the hidden risks.
Conclusion: The Shift Has Already Begun
This is not a theoretical future. The shift away from U.S. Treasuries is happening now.
And it’s not just about yields or bond auctions — it’s about trust in the system.
Gold remains:
- Liquid
- Borderless
- Timeless
- Free from counterparty risk
If you’re concerned about where the global economy is headed — or about your family’s future wealth — now is the time to act.
🛒 Explore physical gold in our store
📩 Or reach out for help getting started
Frequently Asked Questions About US Treasuries, Gold, and Investor Strategy
A: US Treasuries are debt securities issued by the US government. Investors buy them because they’ve long been considered low-risk, offering steady returns backed by the US Treasury. They are also widely held by banks, pension funds, and central banks around the world.
A: Gold is viewed as a safe haven because it has no counterparty risk. It isn’t tied to any one country, bank, or currency. In times of inflation, financial crisis, or currency debasement, gold often holds its value or even rises when other assets fall.
A: Many KiwiSaver and managed funds include bonds or fixed interest investments. If US Treasuries lose value or trust, those bond holdings may underperform — even if you haven’t invested in them directly. That’s why it’s important for NZ investors to understand this global shift.
A: That depends on your goals and risk tolerance. Gold can act as a hedge against inflation and financial instability. You don’t have to choose one over the other — but having some exposure to physical gold may help protect your wealth if confidence in bonds continues to fall.