From the perspective of asset returns, the return rate of US dollar assets in the past three years has not been low. But Liang Zhonghua found that for many economies now, what needs to be considered is not the issue of return on investment, but the issue of whether the investment principal can be cashed in the future. Based on these considerations, the proportion of gold allocated in the official reserves of various countries will continue to increase, just like the historically trade surplus of Spain, the United Kingdom, the United States and other countries have placed most of the reserves on gold.
The gradual decline in US dollar credit has become a key factor affecting the future. In Li Huihui’s view, “USD credit” is not a static indicator, but a liquidity network maintained by international consensus. Judging from the current trend, the boundaries of this network are shrinking. The sensitivity of major economies around the world to foreign reserve structure, cross-border settlement systems and financial sanctions tools is increasing, which means the US dollar is losing its “undisputed settlement status.”
Against this background, the logic of gold’s allocation has undergone a fundamental change. It is no longer a linear hedge on inflation, but a systematic protection of the “break of the currency protocol.” Especially for emerging market central banks, US dollar assets were once the core tool for maintaining currency value and exchange rates. However, as developed countries frequently use monetary tools for “non-market intervention”, these central banks began to realize that sovereign stability cannot be fully entrusted to currencies of other countries. Therefore, increasing gold holdings is an active response to “monetary sovereignty” rather than a passive defense.
According to data from the World Gold Council, the global central bank buying wave is an important driving force for the rise in gold prices. Comparing the annual average gold demand increase from 2022 to 2024 and 2019 to 2021, the total global gold demand increased by 115.2 tons, of which the global central banks’ gold purchase demand increased by 621.7 tons, far exceeding the growth of total demand. However, residents’ consumer investment demand and enterprises’ technical capital demand have all declined. Structurally, central banks such as China, Turkey, Poland, India, Singapore, Middle Eastern economies, and Russia are important sources of capital purchase demand.
