The world has now entered into a new financial phase where multipolar currencies are at play at large. This transition is particularly impacting the US dollar, as the constant weaponization of the USD coupled with the local currency narrative catching pace has compelled the banks to diversify their assets. In this wake, will the US dollar be able to handle the surge of new assets that are eyeing its crown with ambitious eyes and intentions?
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US Dollar Has A New Competitor Now
The consistent rise of de-dollarization drives has always broadcasted a major outlook, streamlining how the world has had enough of dollar supremacy. The countries at large want to diversify, transact in local currencies, and at the same time, want to liberate themselves from the constant dollar weaponization that has led them to find USD alternatives.
“A stronger USD would weaken its role as a reserve currency. If access to USD becomes more expensive. Borrowers will search for alternativeEconomistssts at Allianz, an international financial services firm, wrote in a June 29 report.
At the same time, a notable financial analyst, Gary Stone, outlined a stark difference on X, adding that the global central bank’s USD reserve stats have now fallen from 71% to 59%. This stark fall has been credited to the rising de-dollarization narrative and the fact that the countries are now shifting their interest towards gold, which has hit a new high of $2586.
The reason? De-dollarization.
The share of US dollars in global foreign exchange reserves has plummeted from 71% to 59% since 2000.
Countries are actively moving away from the dollar – and they’re not just buying any asset – they’re buying gold.
This reveals something crucial: pic.twitter.com/nmaElpKU7Q
— Gary Stone (@GaryStoneSWS) January 31, 2025
Stone shared how major world orders are losing faith in the dollar. He later shared how banks are hoarding gold to stabilize their assets from the USD volatility. The expert later stated how gold reserves cannot be sanctioned or frozen. This critical point is a major driver for pushing banks to buy gold and diversify away from the US dollar.
“Market psychology drives everything. And right now, the psychology is clear: major financial institutions are losing faith in traditional currencies. They’re seeking something more stable. But that’s not all. Countries are using gold to protect themselves from geopolitical risks. Remember what happened to Russia’s foreign reserves in 2022? They were frozen . Now, nations are realizing that gold can’t be frozen or sanctioned.”
Countries are using gold to protect themselves from geopolitical risks.
Remember what happened to Russia’s foreign reserves in 2022?
They were frozen.
Now, nations are realizing: Gold can’t be frozen or sanctioned.
But there’s an even bigger shift coming: pic.twitter.com/ZHfFnAEZ5z
— Gary Stone (@GaryStoneSWS) January 31, 2025
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Gold Price To Hit $3000?
In the middle of this, Trump’s aggressive tariff deployments with China imposing a counter-tariff on the US are once again sparking US dollar volatility. This fluctuation has led gold to once again spark a major rally, which has helped the asset surge to claim a new high of $2854.
Per Goldman Sachs, gold may hit an all-time high of $3000 by the end of 2025. In addition to this, notable financial analyst Rashad Hajiyev noted how gold may undergo a few price dips before hitting a new high of $2900 very soon.
Spot gold is back above $2,800, but that does not mean the fight over this level is over. I prefer a few more dips under $2,800 before gold rallies towards $2,900. Slowly but surely… pic.twitter.com/2024NwjnqX
— Rashad Hajiyev (@hajiyev_rashad) February 4, 2025
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