The process of de-dollarization is gaining some anticipated momentum as some foreign banks have decided to dump about $60 billion in U.S. treasuries, while also signaling a major shift in global currency dynamics. This trend reflects growing concerns about the American economy amid tariff policies and debt levels.

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Central Bank Gold Buying and the Global Shift From the U.S. Dollar

Central bank gold buying has accelerated as countries seek alternatives to dollar holdings. The de-dollarization process is visible in record gold purchases and U.S. treasury sell-offs.

Gold Becomes the Safe Haven Asset

Gold purchases by central banks have doubled since 2022, reaching over 1,000 tons annually. This de-dollarization strategy reflects diminishing confidence in U.S. economic policies.

Michael Widmer, commodity strategist at BofA, said:

“Emerging market central banks currently hold around 10% of their assets in gold. They should really hold 30% of their assets in gold.”

Foreign Banks Retreat From U.S. Treasuries

The recent de-dollarization trend is also evident in the massive sell-off of U.S. treasuries. Global currency shift patterns suggest this isn’t a temporary thing, no matter how it sounds for the greenback supporters.

Thierry Wizman, global foreign exchange strategist at Macquarie, said:

“What we’re seeing today is a further indication that the structure and nature of the U.S. dollar’s relationship to global markets has changed.”

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Global Economic Implications

De-dollarization risks include market volatility and potentially higher U.S. interest rates. The global currency shift could fundamentally alter international trade.

Per Jansson, Sweden’s central bank deputy governor, warned:

“If (the dollar’s status) would change, that would be a big change for the world economy… and would basically create a mess.”

Antonio Fatas, macroeconomist at INSEAD business school, cautioned:

“This erratic behavior is too risky. This is such an inflexion point for the role of the U.S. The problem is that we don’t have an alternative to the dollar – and that is why this is going to be painful.”

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The de-dollarization movement continues to gain momentum through central bank gold buying and U.S. treasury sell-offs, reshaping the future of global finance.