Gold in the Era of Dedollarization

In a changing global economy, gold emerges as an increasingly relevant financial asset. Gold’s strengthening value is driven by a recent phenomenon silently gaining speed: De-dollarization.

How is gold strengthened by de-dollarization?

China and the Reduction of Dollar Dominance

In the video "Is China Dumping the Dollar?", economist Patrick Boyle, professor at King's College London, examines the future of the US dollar and its role as a backup asset. The central question is clear: Are we seeing the beginning of the end of the dollar's global dominance?

The most recent evidence seems to point in that direction. According to a report from the Reuters news agency, the People's Bank of China has urged the country's state-owned enterprises to prioritize the use of the yuan in their international transactions. This measure goes far beyond the symbolic: it is part of a strategic and sustained effort by China to strengthen the role of the yuan in global trade and finance.

Is China getting rid of the dollar?

In response to the rising trade tensions with the United States, and aiming to shield itself from the volatility of the markets dominated by the dollar, China is promoting a parallel financial architecture. This includes expanding the use of the yuan in exports and imports, offering cross-border credit facilities in its currency, and strengthening its own international payments system (CIPS). Innovations such as the integration of blockchain are even contemplated to improve the efficiency of the transactions.

By actively promoting the yuan as a means of international payment, China seeks to reduce its vulnerability to sanctions and external pressures, and position itself as a credible alternative to the dollar-centered monetary order. In this context, the de-dollarization is no longer just a speculative narrative, but a tangible economic strategy led by one of the greatest powers in the world.

The Decline of Hegemonic Currencies

Ray Dalio, founder of the biggest hedge fund in the world, Bridgewater Associates, has warned on different occasions about the possible decline of the dollar as a world reserve currency. In his analysis of the historical cycles of economic and monetary power, the prestigious financier points out that no monetary empire has been eternal. Fiscal weakening, geopolitical tensions and excessive money printing without greater support than the incessant issuance of debt, usually mark the beginning of the end of a dominant currency.

According to official data from the Treasury Department, at the beginning of 2025, the United States’ national debt is equivalent to 124% of its GDP, exceeding US $36 trillion. Additionally, this inflation forces the Federal Reserve to make difficult decisions, as a result, investors and creditor governments in the United States begin to consider alternatives.

Gold: Asset without Flag

In the midst of this changing paradigm gold reaffirms its essence. Its value does not depend on a government's promise to pay, nor on confidence in a specific economy. It is a neutral asset, without counterparty risk, that has served as a store of value throughout history and through countless financial crises.

China is not only promoting the use of the yuan in international transactions; it has also significantly intensified its gold purchases as part of a strategy and to diversify its reserves and to reduce its dependence on the US dollar.

The People's Bank of China has increased its gold reserves for several consecutive months. According to reports from the World Gold Council, in March 2025, China added 2.8 tons of gold, raising its official holdings to 2 thousand 292 tons of gold. This trend reflects a deliberate strategy to strengthen its financial stability and promote the internationalization of the yuan. 

China is not alone following this strategy. In 2024, Central Banks worldwide acquired more than thousand tons of gold for the third consecutive year, far exceeding the annual average of 473 tons between 2010 and 2021.

What does this mean for investors?

For those looking to protect the purchasing power of their money, gold is presented as a strategic option, functioning as a hedge against monetary volatility, persistent inflation and the geopolitical risks.

In April 2025, gold’s price reached historical highs, exceeding US $3,300 per ounce, driven by global economic uncertainty, the increase in gold purchases by central banks and the growing distrust of traditional fiat currencies.

The financial world is changing. Even though the US dollar could take decades to lose its privileged position as a reserve currency, its exclusive dominance is increasingly questioned. History remembers a fundamental lesson: When the value of currency dissipates, gold continues to shine. In the midst of uncertainty, its timeless brilliance becomes a refuge and symbol of trust.

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