By Arman Sidhu |

House Bill 2140 would authorize the Arizona State Treasurer to invest up to ten percent of state trust and treasury monies in physical gold and silver bullion, stored in a U.S.-based commercial depository meeting industry standards for secure storage, insurance, independent audits, and physical segregation.

The bill passed the House 31-24 on March 10 and has since cleared the Senate Finance Committee (4-2-1), the Senate Rules Committee, and received Do Pass recommendations from both the Senate majority and minority caucuses.

It does not create a new government agency. It does not require the Treasurer to buy a single ounce. It permits the state to do what the world’s central banks have been doing aggressively for over a decade: hold physical gold as a component of sound reserves management.

The case for that permission starts with the stock market. The S&P 500 is supposed to represent the broad American economy. Seven companies (Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla) now make up roughly a third of the entire index and accounted for a majority of its total annual return in each of the past three years.

All seven are leveraged to the same artificial intelligence thesis, and by two widely tracked valuation measures the market sits at levels seen only once before: immediately preceding the dot-com crash. When the financial health of a state’s reserves depends on a single narrative playing out as planned, prudence demands diversification.

The traditional alternatives, such as private equity and hedge funds, offer little comfort; during Warren Buffett’s famous ten-year wager, a simple index fund returned 7.1% annually while top hedge funds managed 2.2%, with managers retaining roughly 64 cents of every dollar of profit.

Gold tells a different story. Over 25 years, gold has returned more than 1,000% (a compound annual rate exceeding 10%), outpacing the S&P 500 Total Return Index, and was positive in eight of the nine years since 1971 when equities posted losses. Central banks have acted accordingly: global gold purchases have exceeded 1,000 tonnes annually since 2022, roughly double the prior decade’s average.

A 2025 World Gold Council survey found that 95% of central bank reserve managers expect holdings to increase further, and gold now constitutes a larger share of central bank reserves worldwide than U.S. Treasury securities for the first time since 1996.

The AI concentration that dominates equity markets also carries labor market consequences that are already visible in the data. Challenger, Gray & Christmas tracked nearly 55,000 U.S. layoffs directly attributed to AI in 2025, part of over 91,000 AI-cited cuts since tracking began in 2023. January 2026 saw 108,000 total planned layoffs (the highest for that month since 2009) against just 5,300 new hiring announcements (the lowest January on record). The firms spending the most on AI are simultaneously cutting the workforce that buys their products.

There is a national security dimension worth considering. Foreign investors hold approximately $35.3 trillion in American securities, including nearly $8.5 trillion in Treasury debt. Gulf sovereign wealth funds in Saudi Arabia, the UAE, and Qatar collectively manage over $3 trillion in assets with major stakes in American companies and infrastructure. A February 2026 study from the German Institute for International and Security Affairs found that these funds have evolved into active strategic players capable of exercising economic leverage over host countries.

The BRICS bloc (now ten nations representing 46% of world population and 37% of global GDP) launched a prototype gold-backed settlement currency in late 2025 designed to bypass the dollar system entirely. China has cut its Treasury holdings by more than 47% from their 2013 peak while increasing gold reserves to over 2,300 tonnes. India and Brazil are following the same pattern. A state that holds a portion of its reserves in a tangible, sovereign asset carries one less point of vulnerability.

Arizona’s demographics sharpen the fiscal stakes. Nearly one in five residents is 65 or older, a share projected to reach 22% by 2035 in the nation’s second most popular retirement destination. An aging population draws more heavily on state services and reserve funds. A modest bullion allocation to an asset that has outperformed equities during every major downturn since 1971 is precisely the kind of prudent stewardship that trajectory demands.

Other states are already moving. Texas established its Bullion Depository in 2015; the facility holds over $400 million at zero cost to taxpayers. Wyoming has a $10 million gold reserve. Tennessee is pursuing one exceeding $60 million. Arizona already exempts bullion from state sales and capital gains taxes. HB 2140 is the logical next step.

In time, a full state-administered bullion depository offering secure storage to Arizona residents and local governments may warrant legislative consideration. For now, HB 2140 gives the Treasurer authority to hold a portion of the state’s reserves in the one asset class that has preserved purchasing power across every major financial disruption of the modern era. The Senate should pass it, and the Governor must sign it to secure taxpayer money.

Arman Sidhu is a lifelong Arizona resident and educator. He is a doctoral student in education at Arizona State University’s Mary Lou Fulton Teachers College. His opinions are entirely his own.