Gold takes the spotlight! Central banks worldwide make the biggest cut in U.S. dollar holdings in 30 years.

         In 2025, a major turning point emerged in the global financial system: for the first time in nearly 30 years since 1996 central banks around the world now hold more gold by value than U.S. government bonds. This shift highlights a growing process of “de-dollarization,” as nations steadily reduce their reliance on the U.S. dollar. The move reflects mounting concerns over U.S. fiscal stability, intensifying geopolitical tensions, and the use of the dollar as a “financial weapon” through international standards.

The World Gold Council reported that last May, global gold reserves reached 36,344 tons, with their total value rising as gold prices surged to $3,500 per ounce. As a result, the combined value of these reserves surpassed the roughly $3.8 trillion worth of U.S. government bonds held by foreign investors. Analysts view this situation as “the beginning of a new rebalancing” of the global financial system.

Over the past three years, central banks worldwide have been accelerating gold purchases at record levels. In 2022, they made net purchases of 1,136 tons—the highest since 1950 and more than double the average between 2010 and 2021. This trend continued through 2023 and 2024, transforming gold’s role from merely a “risk hedge” into a “strategic asset” for managing global reserves.

At the same time, the U.S. dollar is losing its dominance. The share of dollars in global foreign exchange reserves fell to 57.8% by the end of 2024, the lowest level in more than 30 years and down from 72% in 2002. When gold is included, the dollar’s share drops further to 46% of total reserves, while gold has risen to 20%, overtaking the euro at 16%.

Several factors are driving this trend: the use of the U.S. dollar as a sanctions tool in the case of Russia, concerns over U.S. public debt surpassing $37 trillion, and efforts to diversify reserve portfolios to reduce reliance on a single currency. A JPMorgan report even suggests that rising gold demand is fueling a bull market, with prices potentially reaching $4,000 per ounce by 2026.

Although the U.S. dollar remains the world’s primary reserve currency, even a slight reduction in holdings by other countries could send shockwaves through the U.S. economy. Global demand for dollars has long been the key mechanism supporting America’s ability to borrow and spend beyond its means. If that demand weakens, dollars could flow back into the domestic system, putting downward pressure on the currency, fueling inflation, and in the worst case triggering severe inflationary conditions.

         All of this reflects that the world is entering a new era where gold is once again taking on a vital role, while the U.S. dollar faces growing challenges both from internal vulnerabilities and from the global push to reduce excessive dependence on a single currency.