The dollar’s dominance in global foreign exchange reserves is declining to record two-decade lows, while gold is emerging as the dominant safe haven for central banks. According to the Kobeissi Letter, the US dollar now accounts for about 40% of global reserves, the lowest level in the last twenty years. This figure has dropped by 18 percentage points over the past decade. Simultaneously, the share of gold in global foreign exchange reserves increased by 12 points, reaching 28%, the highest since the early 1990s. Gold now accounts for a larger share of global foreign exchange reserves than the euro, yen, and pound combined, according to analysts.
Central banks and the investment shift
Central banks continue to diversify their reserves away from the dollar while simultaneously increasing gold holdings in their vaults. In 2025, the price of gold skyrocketed by +65%, the largest annual increase since 1979, while the US Dollar Index fell by -9.4%, recording its worst annual performance in eight years.
Rising risks and proactive strategy
As Anton Tabakh of Expert RA explained to TASS, this trend is linked to rising risks in US government debt and concerns regarding its credit quality. The rapid rise in gold prices and the increase in holdings led to a larger share of gold in reserve values, due to both valuation adjustments and increased volumes. "This choice is based on the careful strategy of central banks: there are no better alternatives for dollar assets, but the assets themselves raise questions," the economist stated. The picture is clear: the dollar is losing its exclusive privilege as a safe haven currency, while gold is making a strong comeback as the dominant pillar of international reserves.
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