Gold just got promoted. As of July 1, 2025, physical gold is now officially classified as a Tier 1 asset under U.S. Basel III banking regulations. That means banks can count gold at 100% of its market value toward their core capital reserves. No haircut. No markdown. Same treatment as cash or Treasuries. This is not a symbolic upgrade. It’s a structural shift in how the U.S. financial system treats gold. The reclassification is already triggering movement across commodities, with metals surging and institutional demand accelerating.
The rule change is part of the Basel III Endgame framework, finalized earlier this year and now in effect. U.S. banks are allowed to hold allocated physical gold as part of their high-quality liquid assets. That’s a reversal from the previous Tier 3 status, where gold was discounted by 50% for reserve calculations. The new classification gives gold full reserve credit. That’s a green light for banks to accumulate bullion without penalty. It also reduces exposure to synthetic gold products and paper derivatives.
Central banks are already ahead of the curve. In Q1 2025, they added 244 metric tons of gold to their reserves, a 24% jump over the five-year quarterly average. The World Gold Council says 30% of central banks plan to increase holdings in the next 12 months. That’s the highest level ever recorded. The message is clear. Gold is being treated as real money again. Not a hedge. Not a relic. A reserve-grade asset.
Retail sentiment is shifting too. Gallup polling shows 23% of Americans now view gold as the best long-term investment. That’s up from 16% last year. Stocks came in lower. Only real estate ranked higher. Gold is trading at $3,340 per ounce, up 18% year to date. Forecasts are climbing. Some analysts now see $6,000 per ounce as a medium-term target.
Black Rock is loading up the #silver & #gold train as Basel 3 now allows lending against gold Tier 1 asset as they prepare for the dollar’s demise. 🤫 pic.twitter.com/ArnykmNhbd
— LMRRRR (@LMRResearch) July 5, 2025
The breakout is not limited to gold. Silver is up 27% in 2025. Copper is trading at $4.64 per pound, up 19%. Platinum and palladium are both up double digits. Uranium is holding near $70 per pound, up from $9 in 2011. The commodity complex is moving. Supply chains are tight. Demand is rising. Tariffs are adding pressure. The setup looks like the early phase of a supercycle.
Commodity supercycles are rare. They typically last 10 to 20 years and are driven by structural demand shocks. The last one ran from 2001 to 2011, fueled by China’s industrial expansion. This time, the drivers are different. De-dollarization. Energy transition. Supply chain reshuffling. And now, gold’s elevation to Tier 1 status. That’s not noise. That’s a signal.
Sources
https://www.resource-capital.ch/en/news/view/commodity-supercycle-ahead/