Gold & Currencies Shift, Yet the World Is Not Really De-Dollarizing

De-dollarization is still more fiction than fact, at this moment. This is even when the US economic weight has been decreasing to about 26% of the global GDP compared to the 40 percent of the global GDP in the 1960s when it was still dominant (the dollar) around 69 percent of the cross-border transactions.

Though changes are evidenced in commodity markets as well as in reserve composition, the bond that is maintained by a greenback is due to the absence of liquid substitutes. This trend has made gold the main beneficiary, with central bank stocks soaring and prices moving rapidly toward the 4000 per ounce threshold.

Also Read: BRICS Gold Reserves: How Much They Have & De-Dollarization Impact

Also Read: BRICS Gold Reserves: How Much They Have & De-Dollarization Impact## Global Currency Trends, Gold Demand, And Effects of De-Dollarization

Source: iStock### The Dollar’s Unexpected Staying Power

The fact that America is losing its economic footing and dollar control depicts why dollarization has not taken the shape that many had assumed. US exports have fallen as a portion of the entire world trade, and today US exports account for merely 10 percent compared to 20 percent in 1950s, while China has increased to 12 percent in the same period. However, the dollar usage in foreign currency lending has dropped by only 3 percentage points from 72% in 2016 to 69%, which represents a relatively small decline when you consider it.

Louis Oganes, who is the managing director and head of global macro research at JP Morgan, had this to say:

“You would expect given the lower weight of the US in global trade in global GDP that the dollar should have lost already more than the share that it has.”

**“You would expect given the lower weight of the US in global trade in global GDP that the dollar should have lost already more than the share that it has.”**China’s yuan accounts for merely 3% of global transactions despite the active internationalization efforts Chinese authorities are making. The US Treasury market remains the world’s deepest and most liquid, and no country comes anywhere close to replacing it right now. Even after the US lost its AAA rating, treasury demand hasn’t significantly weakened, which proves that this transition isn’t happening at the rates many projected. The reason stems from limited alternatives that investors can actually turn to.

Where the Real Shifts Are Taking Place

Structural changes appear most clearly in commodity settlement, though. Around 20% of oil is now being traded outside the dollar system, and mostly in yuan at that, which has broken the traditional petrodollar correlation that used to exist. US sanctions on Russia, Iran, and also Venezuela forced these exporters to accept discounted prices while they settle payments away from dollar frameworks.

Oganes had this to say:

“This is a trend that will probably continue and uh uh you know it is as I said before you know maybe uh 10 15 years ago most of uh commodities were settled in dollars and now we’re seeing 20% and growing share in the case of oil.”

**“This is a trend that will probably continue and uh uh you know it is as I said before you know maybe uh 10 15 years ago most of uh commodities were settled in dollars and now we’re seeing 20% and growing share in the case of oil.”**Central bank reserves show similar patterns, and it’s worth noting here. Dollar holdings have declined from 85% in the 1970s to around 60% today, though this still represents pretty clear dominance. The seizure of Russian reserves after Ukraine’s invasion accelerated diversification concerns among reserve managers worldwide, particularly when it comes to strategies involving gold.

Gold Emerges As The Clear Winner

Gold has become the true alternative to dollar reserves rather than competing currencies stepping up. Emerging market central banks increased their gold reserves from 4% a decade ago to 9% currently, while developed nations hold around 20% in the yellow metal. This rotation directly addresses whether this shift is even possible through tangible assets.

Price acceleration tells the story pretty clearly. Gold took 12 years climbing from $1,000 to $2,000 per troy ounce, then just four years reaching the $3,000 level. JP Morgan forecasts $4,000 in the first half of 2026, and potentially $6,000 by 2029 or 2030.

Oganes stated:

“Gold right now stands at around 20% of central bank reserves in the developed markets and around 9% in the emerging markets. These 9% lose lose modes but uh literally 10 years ago is was only 4%.”

**“Gold right now stands at around 20% of central bank reserves in the developed markets and around 9% in the emerging markets. These 9% lose lose modes but uh literally 10 years ago is was only 4%.”**Also Read: Stocks & Gold at All-Time Highs, Crypto Stuck in Red: Why Is That?

**Also Read: Stocks & Gold at All-Time Highs, Crypto Stuck in Red: Why Is That?**China’s potential move to allow local banks to start accumulating gold could unleash massive additional demand, and supply constraints amplify the bullish outlook since exploration to production timelines stretch 8 to 10 years or more. The effects increasingly flow into physical gold rather than alternative fiat currencies being adopted.

The Passive Treasury Rotation Underway

Foreign treasury holdings have dropped from 50% during the 2008-09 crisis to 30% today, but this reflects passive rotation rather than aggressive selling taking place. With 30% of foreign-held bonds maturing soon, holders can simply redirect proceeds elsewhere when the time comes. As debt-to-GDP potentially reaches 125% over the next decade, questions intensify even as the dollar maintains structural advantages that keep sudden shifts unlikely for now.