Gold threatens the dollar's dominance in global reserves and triggers a structural shift in the global economy.

 

Gold is on the verge of dethroning the US dollar as the global reserve asset of choice, a move analysts consider an imminent structural shift in the global financial system.

 

This shift is driven by the historic revaluation of gold, which recently exceeded $4,200 per ounce, as well as an aggressive portfolio diversification strategy adopted by central banks.

 

Gold's strengthening has led to bold projections about its future price potential. Michael Hsueh, a research analyst at Deutsche Bank, warns that if gold were to match the dollar's current share of global reserves, its price per ounce could rise to $ 5,790 dollars.

 

"If gold's share were to equal that of the dollar, the price of the metal should be around $5,790 per ounce, assuming that current volumes of gold in global system reserves remain unchanged," Hsueh said.

 

Geopolitical uncertainty and growing doubts about the overvaluation of the dollar have catalyzed this trend of "dedollarization".

 

 

 

The erosion of the dollar's dominance is not only due to the gold boom, but also to increased distrust in the US currency. The report highlights that "the perception of an overvalued US dollar and recent geopolitical decisions, such as the freezing of Russian assets following the invasion of Ukraine, have increased uncertainty for countries with significant dollar reserves." These actions have prompted nations to seek safer, more secure assets that are less subject to unilateral sanctions.

 

Goldman Sachs Projects a Sustained Rise

 

Looking ahead, gold's bullish trend appears to be holding strong. Goldman Sachs projects that the precious metal will continue its rise, expecting it to reach $4,900 per ounce by the end of 2026. This forecast underscores gold's established role as a robust store of value and a shield against global economic volatility.

 

In short, the current movement in international reserves marks a significant shift in the dollar and a return to the prominence of gold, symbolizing a move toward risk diversification and a profound transformation in the international financial architecture.