The last time my clients were invested in gold was in 2009, when prices were around 900 dollars. We exited the position in 2013 at about 1500 dollars, which I discussed in my article The Gold Crash - We dodged a bullet. At the time, I wrote that I was pessimistic about gold’s performance over the following one to two years, but that it would make a good long-term investment for those willing to hold it for five years or more. Since then, gold prices have hovered around the same range for nearly a decade.
Gold came back onto my radar in 2024 when it first broke the 2000 dollar level. At that time, there were more attractive opportunities driven by the AI technology boom that offered the potential for higher returns. Fast forward to 2025, the landscape has shifted toward an economic environment reminiscent of the early 2000s, shaped by the protectionist policies of the Trump administration in the United States.
Historically, the main factor driving gold rallies has been the weakening of the world’s reserve currency, the U.S. dollar. In the early 2000s, the creation of the euro through the formation of the European Union introduced a credible alternative reserve currency. At the same time, concerns over America’s growing fiscal deficit led investors to sell U.S. dollars in exchange for euros and gold. At one point, oil-producing nations in the Middle East even considered pricing oil in euros instead of U.S. dollars. However, the European financial crisis later undermined confidence in the euro as a strong contender to replace the dollar, and the greenback regained its dominance — until 2025.
Gold prices had been steadily rising since the COVID pandemic, supported by a high inflation environment. However, three major events in recent times have changed global perceptions of the U.S. dollar, leading to a structural shift in gold — and prompting me to re-enter the market.
1) Russia-Ukraine war & Geopolitical rivalry
The first major event that triggered the shift away from the U.S. dollar was the Russia-Ukraine war. When the U.S. imposed financial sanctions and locked Russia out of the American banking system, it forced Russia to seek alternative ways to conduct trade with other nations. Global trade conflicts and great power rivalries, particularly involving China, one of the largest holders of U.S. Treasuries, have driven efforts to reduce reliance on the dollar. The rise of the Trump presidency, with its unpredictable approach to international relations, added another layer of uncertainty.
Fiscal standoffs, sweeping sanctions, and volatile leadership have all contributed to an environment where dollar-denominated assets can suddenly become restricted or politically weaponized. In contrast, gold carries no counterparty risk, cannot be frozen electronically, and serves as a form of “insurance” against U.S. financial dominance for both nations and investors.
2) Trade war and Structural shifts in global reserve composition
The trade war added to the speed of diversification away from USD as the largest holders of are often historical allies of the united states. The shock of the tariffs war has exposed the truth that United States can turn on its allies in a blink of an eye and the trust that US can be a reliable ally has been severely damaged.
The dollar’s share of global FX reserves has fallen from 71 % in 2001 to 54.8 % in 2024. When gold is included, the effective dollar share drops further to 48 %. Meanwhile, central banks bought 1,044 tons of gold in 2024,the largest annual purchase on record, and the first time since 1996 they preferred gold to U.S. Treasury.
This is not a symbolic hedge; it is a structural shift. The very institutions that manage currency systems are diversifying into an asset they cannot print.
The fact that foreign central banks now hold more gold than U.S. Treasuries is a significant milestone that signals a deeper, longer-term, structural change in reserve management, and may well represent the early stages of a major realignment in global reserve composition.
3) The U.S. deficit and rising interest‐service burden
The 3rd event was the government budget resolution passed in April that will lead to increased budget deficit. The U.S. now carries over $37 trillion in national debt, with annual deficits running above $2 trillion. The scale of this imbalance is becoming increasing difficult to manage. In 2024, net interest payments on U.S. federal debt reached US$ 892 billion, or about 13 % of federal expenditures and is expected to become a heavier burden as time goes by. This makes holding US treasuries risker over time as it increases the risk that US may not be able to finance their debt in the future should the current spending pattern persist.
The US Dollar is still here to stay
While gold offers these structural benefits, it is not without trade-offs: it yields no cash flow, can be volatile in the short run, and must be stored and insured. So gold should not dominate a portfolio but serve as a strategic ballast.
De-dollarization is not a clean handoff to a new global emperor. The yuan faces structural barriers, the euro struggles with fragmented governance, and no single alternative commands universal trust. Instead, we are heading into regional blocs and bilateral trade systems, a kind of “monetary mob family” world where currencies compete for influence without replacing the dollar outright.
This is reminiscent of the messy 1920s–1930s transition when the pound sterling was fading and the dollar was not yet ready to lead. In that vacuum, gold served as the anchor of global trust. Today, the same pattern is emerging: gold as the fallback in an era of fragmented monetary order.
The U.S. dollar will still be here to stay, because there is no other reserve currency as liquid, widely traded, or institutionally embedded. The collapse of the dollar will not be sudden. Instead, it will be a long-term slide that may take a generation to play out. For investors, this slow erosion still makes gold a valuable complement, an asset that can protect wealth through the gradual but inevitable shifts in the global monetary order.
Portfolio Performance and Strategy Going Forward
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