De-Dollarisation and Gold’s Steady Return

Why is gold resurging and the world slowly losing trust in US bonds?

Ripples have spread through the financial markets as gold overtakes US bonds as the world’s largest foreign reserve asset in 2026.  For the first time in roughly 30 years, the value of gold held by central banks has approached $4 trillion, surpassing the $3.9 trillion worth of US government bonds.  

This shift comes at a time when the price of gold has skyrocketed, reaching $4,500 an ounce at the end of 2025; with more than 70% gains amid great geopolitical instability and global uncertainty. Historically, such times would have stimulated demand for the US Treasury, which, for decades, has acted as a safe-haven: renowned for its liquidity, and reliability. Today, however, that trust appears to be steadily dismantling, with gold reaching an unprecedented high of $5,000 an ounce this year and reclaiming its position as a primary financial asset.  

Politics seems to be one of the most significant factors behind this shift. As Trump’s policy stance continues, additional tariff threats on European countries and ambitions to acquire Greenland, foreign markets have been affected as businesses take in the uncertainty around exports and investments, displaying extreme caution. At the same time, US national debt has surpassed $38.4 trillion, raising questions about the consequential impact this could have on monetary stability and political agendas.  

Among this chaos, gold presents itself as a risk averse opportunity and a hedge against inflation and political tensions. For both investors and central banks, gold signals financial security as it maintains its intrinsic value despite external shocks to the market. Bolstered by constant demand due to its extensive uses, gold continues to function as a ‘safety net’ for many during times of crisis. Looking ahead, gold is not just making ripples in the financial markets but is slowing toppling the whole system as we know it.  

The resurgence of gold aligns itself perfectly with the steadily growing de-dollarisation movement. Countries around the world are stockpiling bullion, attempting to reduce reliance on the US dollar, diversify their reserves, and mitigating their risks.

Nations such as Russia and China have accelerated their de-dollarisation strategies by “[controlling] around 50% of global gold production.”

Emerging markets appear to be playing a similar hand as countries such as India, Turkey, and Kazakhstan have been aggressively accumulating gold under inflationary concerns, economic turbulence, and diversification strategies.  

The gradual shift towards this metal reflects the complex web of politics and economic reliance. It underlines governments’ visions of recalibrating and shifting away from the dollar and US owned assets. As political tensions continue to escalate and alliances have become strained, this serves as a pivotal point in increasing financial sovereignty and safeguarding against any potential US fallout.  

Beyond politics, several other forces play a crucial role in fortifying gold’s appeal. Lower interest rates mean lower returns in bonds, causing investors to turn towards precious metals as investment opportunities. While the US Federal Reserve decided to hold interest rates at 3.5% - 3.75% after their meeting in late January, consecutive cuts by the central bank last year, along with predications of further cuts later this year, have prompted investors to search for safer commodities.  

Looking ahead, gold’s trajectory appears increasingly positive. As current political tensions continue to sway investor confidence, analysts’ expectations shift towards gold and its long-term potential. Goldman Sachs Group Inc. raised its gold forecast from $4,900 to $5,400 for the end of the year, emphasising a strong confidence in gold as security against global market fluctuations.