Gold continues to break price records, firmly consolidating at $3,600 per troy ounce and—with occasional corrections—moving toward a new peak of $3,700.
What does this surge signify: hidden global dollar inflation or a return of the financial system to the “gold standard”?
Until recently, US government bonds were the universal instrument for shaping national reserves.
And suddenly Financial Times highlights a striking fact: central banks worldwide now hold gold assets whose value matches their portfolios of US treasuries.
By the way, money and oil remain the best geopolitical litmus tests.
The task of treasuries has been to cover America’s structural imbalances under the “two deficits” system—budget and current account—while temporarily immobilizing surplus dollar liquidity earned by dozens of countries either through positive trade balances (in dollars) or external borrowing of credit and investment resources (also in dollars).
Besides, this system, whereby the world parked its reserves in “American debt,” functioned as both a mechanism of financial neocolonialism—exchanging the world’s key fiat currency for real goods and assets—and a source of economic growth, granting countries access to the US premium market.
The entire world wanted to trade with the United States, the world’s largest generator of effective demand. Most countries earned dollars for their goods and services—and invested those same dollars in US debt.
That was the unipolar era. But can this architecture endure in a non-polar world?
It is pertinent to observe here that the term “multipolar world” is, strictly speaking, unscientific. Once there are “many” poles, they cease to function as poles in the geopolitical sense. A more accurate term is non-polar world.
And so in recent years, China has slashed its treasury holdings from $1.2 trillion to $750 billion, dropping from first to third place among US bondholders.
Japan now leads, followed by the United Kingdom. The top ten also include two offshore centers—the Cayman Islands and Luxembourg—along with France, Canada and Brazil.
Historically, many central banks—Ukraine’s National Bank among them—were major foreign investors in treasuries. But the landscape is shifting.
Otavio Costa, macro strategist at Crescat Capital, created a widely circulated infographic based on IMF data: of the $11.6 trillion in global foreign exchange reserves, $6.7 trillion (58 percent) is denominated in dollars. That shows the currency structure.
But what about the financial instruments structure? Here lies the revelation: $3.9 trillion—almost 34—of central bank assets are in treasuries.
Almost the same amount, $3.86 trillion, is in gold.
Thus, for the first time in three decades, gold’s share of global reserves has equaled that of US treasuries.
China is one of the leaders of this trend, channeling excess liquidity into gold rather than treasuries.
This in turn drives up gold prices. Were China to actively dump its treasury holdings on the secondary market and redirect those funds into gold, the price surge of the “yellow metal” would be even sharper.
By August 2025, the People’s Bank of China had raised its gold reserves to 74.02 million ounces. For comparison, Ukraine’s reserves hover around 1.3 million troy ounces.
All this unfolds amid what many call the erosion of the dollar’s global role.
The parallels with 50 years ago are striking: President Nixon’s abolition of the gold standard, enshrined in the Bretton Woods system, when “all currencies were pegged to the dollar, and the dollar anchored to gold.”
We are now witnessing the collapse of a 50-year cycle of US dominance, alongside attempts to launch a new ascend cycle under a modernized Indo-Pacific strategy.
If successful, it could sustain US growth for another half-century—virtually the entire 21st century.
The abandonment of the gold standard for the dollar in 1970 was accompanied by a sharp rise in gold prices over the next decade—from 1970 to 1980. During that period, gold soared from $40 to $800 per ounce.
In the 1970s, the United States lost Indochina: a geopolitical debacle in Vietnam and failed ventures in Cambodia and Laos. America withdrew from Indochina, shrinking the perimeter of its imperial iron ring in that part of Eurasia.
Yet the catharsis of the 1970s’ disasters was followed by America’s revival in the 1980s—manifested in cheap oil, falling inflation, Reaganomics and US victory in the Cold War, as the Soviet Union collapsed and ceased to function as an alternative geopolitical pole.
Bretton Woods and its monetary model disintegrated in the 1970s, giving way to the Jamaican Accords with quasi-market exchange rates.
But in practice, this was still the same strong dollar which, as it turned out, led the United States into deindustrialization, shifts in the labor market, a negative trade balance, a deep budget deficit, rising public debt, the loss of global competitiveness in a range of American goods and an avalanche-like increase in the negative value of the US net investment position.
A strong dollar meant hypertrophied financial markets and the logic of “America owes everyone, because everyone wants to buy dollars.”
Today, Trump has effectively launched a process akin to abandoning the gold standard—except he abandoned the model of an expensive dollar and the associated function of global “faith in the dollar.”
Classical political economy reminds us: money’s value is grounded in an act of belief in its intrinsic worth.
When that belief in the dollar wanes, belief in gold rises—and vice versa.
Of course, today differs from the 1970s.
Back then, the US, with China’s help, contained the USSR. Now, Washington seeks to neutralize China with Russia’s tacit neutrality. In the Middle East, too, the actors have shifted: where the USSR once worked through Arab states and Palestine, Russia now operates largely via Iran although the Arab case persists, after the fall of Assad’s regime in Syria it has become auxiliary rather than primary).
In the 1970s, the United States withdrew from Indochina; today, it is engaged in a game of trading neutralities with Russia.
It is worth recalling that any successful reboot of the American project has historically meant a decline in gold prices. For instance, between 1980 and 1990, gold fell from $800 to $400 per ounce. Reaganomics defeated the recession, while the Federal Reserve and Paul Volcker overcame inflation. The dollar began to rise in value and “defeated gold.” America triumphed over the USSR and consolidated its position as the sole global hegemon.
Today, however, the flow of history has accelerated significantly, as have the key structural processes shaping the world.
Will the US undergo a “geopolitical catharsis 2.0”?
Will the gold price boom give way to its collapse?
Will the dollar reclaim global dominance?
Will the US prevail over China?
Will Trumponomics succeed where Reaganomics did?
What will Washington’s “exchange of neutralities” with Moscow bring?
Could America face another “Vietnam syndrome”?
Is there a basis for a Trump–Rubio strategy toward Russia, mirroring Nixon–Kissinger’s rapprochement with China?
The answers will shape the next “gold rush.”
It is to be remembered, however, that one fundamental financial principle remains unchanged: developing countries keep their reserves in dollars, while the US holds its reserves in gold.
America is simultaneously the largest gold holder and the issuer of the world’s dominant fiat reserve currency.
US gold reserves exceed those of China and India—the key Global South economies—combined.
The dynamic is unique: the more dollars Washington prints, the higher global inflation runs—and the more expensive gold becomes.
And where is much of the world’s gold concentrated? In the United States and the IMF (i.e., in the United States).
Simply by storing gold at Fort Knox, America captures an enormous inflation premium.
Now, the Global South has finally begun to play the same game.
This raises the question: why does the National Bank of Ukraine hold only 5 percent of its reserves—around $2 billion—in gold? Why not at least 30–40 percent?
Between 2022 and 2025, central banks across the globe—Poland, Germany, France, Turkey and many others—massively expanded their gold holdings. In wartime, placing part of reserves in gold is a logical step.
Yet such decisions require a certain degree of “monetary sovereignty.”