Korean Media: The Dominance of the US Dollar Undermined … Global Central Banks' Gold Holdings Surpass "Real Dollars" for the First Time in History
¬ After deducting accumulated interest, real dollars shrink to $4 trillion … Gold exceeds $5.5 trillion
Analysts suggest that, amid U.S. President Donald Trump's return to power and global efforts by countries to de-dollarize, the value of actual dollar assets held by central banks has been surpassed for the first time in history by their gold holdings. In light of the war between the U.S.-Israel and Iran, as well as the expansion of U.S. fiscal deficits, physical gold is increasingly emerging as a reserve asset to replace the dollar.
On the 10th, according to reports from Bloomberg and others, Simon White, macroeconomic strategist at Bloomberg, analyzed that the "real dollar holdings" of central banks—after subtracting cumulative valuation gains (interest)—have fallen below the scale of gold holdings for the first time in history. According to official statistics from the International Monetary Fund (IMF), global central banks and monetary authorities have kept approximately $7.5 trillion in "dollar-denominated foreign exchange reserves" stored in vaults for crisis protection. However, after accounting for decades of accumulated interest effects, the actual value of these dollars has now shrunk to around $4 trillion. In contrast, the physical gold holdings of global central banks (approximately 36,520 tons) have surged in value due to recent sharp increases in gold prices, reaching an estimated current value of $5.5 trillion to $5.6 trillion—clearly surpassing the real dollar value.
The core background behind this reversal is a structural distrust toward the dollar-centered financial system worldwide. This move aims to guard against risks such as soaring national debt and cascading credit crises that could destabilize the current financial order. The Western freezing of Russia’s foreign exchange reserves in 2022 triggered widespread concern that dollar assets could be weaponized at any moment—this became a primary reason driving central banks to shift toward gold. Additionally, analysts note that concerns over America’s persistent fiscal deficits eroding the real value of the dollar have also contributed to central banks’ preference for gold.
White stated: “Gold is not only a hedge against currency depreciation and inflation, but also a defensive mechanism against systemic financial risks ranging from severe credit contraction to large-scale monetization of fiscal deficits.” In response, financial investment media moomoo remarked: “In an environment where government debt and credit product risks continue to rise, gold is being re-evaluated as the ultimate safe-haven collateral that owes nothing to any party.”
Source: Chosun Ilbo
Original article: toutiao.com/article/1862063159258112/
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