The central bank is frantically hoarding gold, and the dollar's reserve status is in jeopardy

foreign exchange documentary platform- Jan Nieuwenhuijs, gold analyst at Gainesville Coins, said that since 2009, the central bank's aggressive purchase of gold and the rising price of gold have led to an increasing share of the precious metal in global international reserves, adversely affecting fiat currencies. By the end of 2023, global gold reserves exceed the euro, and the next fiat currency to be challenged is the US dollar.

Jan pointed out that when financial analysts chart the distribution of international reserves, they often focus onforeign exchangeAnd ignore gold, which started when the euro was introduced in 1999.

According to such a chart, the dollar's share of total reserves appears to be slowly declining, from a peak of 72% in 2001 to 58% in 2023.

In addition, there doesn't seem to be a specific fiat currency that can compete with the U.S. dollar.

"But why not include gold and look back as far as possible?" Jan questioned.

"By combining multiple sources, we can get a rough picture of the spread of reserve currencies (fiat currencies and gold) from 1899 to 1935, and the full picture from 1950," he added.

"This paints a completely different story, with charts that not only show the dollar dying at a snail's pace, but also reveal the historical balance between gold and fiat currencies," he added.

He noted that it is not the dollar that usually underpins the international monetary system, but rather gold, which used to make up the bulk of international reserves, even though sterling was considered the world's reserve currency before the dollar. In a chart that covers more years but only gold and the dollar, the latter's dominance becomes more relative.

As can be seen on the chart, there was a clear "golden fork" in the global reserves of gold and US dollars in 1990, but after 2020, the two lines are approaching the "golden fork" state again.

"The chart above shows that the dollar's share of total reserves has fallen to 48 per cent in 2023 as fears of asset bubbles, escalating wars and inflation fears lead to a decline in trust in credit assets [fiat currencies], while gold is rising," Jan said.

According to individual calculations of official gold reserves, including secret acquisitions, the share of gold in total reserves will rise from 11% in 2008 to 18% in 2023. Gold has now surpassed the euro, which has been stuck at 16%.