International News
Gold, ‘Non-traditional reserve currencies’ eat into U.S. dollar’s reserve dominance: Wolf Richter
Gold and other reserve currencies – but not the euro or renminbi – are steadily eroding the U.S. dollar’s position as the world’s preeminent reserve asset, according to Wolf Richter, analyst and publisher of Wolf Street.
“The status of the US dollar as the dominant global reserve currency has helped the US fund its twin deficits, and thereby has enabled them: the huge fiscal deficit every year and the massive trade deficit every year,” Richter wrote in an article published Monday. “The reserve currency status comes from other central banks (not the Fed) having purchased trillions of USD-denominated assets such as Treasury securities, other government securities, corporate bonds, and even stocks. The dollar status as the dominant reserve currency has been crucial for the US, and as that dominance declines ever so slowly, risks pile up ever so slowly.”
Total holdings of USD-denominated securities by other central banks (not the Fed) fell by $59 billion to $6.63 trillion at the end of 2024, from $6.69 trillion at the end of 2023,” he noted. “And the dollar’s share declined to 57.8% of total allocated exchange reserves at the end of 2024, the lowest since 1994, down by 7.3 percentage points in 10 years, as central banks have been diversifying their holdings for years to assets denominated in currencies other than the dollar, and into gold.”
Safe Haven Dynamics – Gold and silver remain under pressure, hovering below key psychological levels of $5000 and $80 respectively, as investors stay cautious ahead of the Federal Reserve decision. Volatility in oil prices is complicating the inflation outlook, keeping real yields elevated and limiting upside in precious metals despite ongoing geopolitical risks.
Geopolitical Developments – Escalation in the US–Israel–Iran conflict, including strikes on energy infrastructure and disruptions in the Strait of Hormuz, has intensified supply concerns in oil markets. While such tensions typically support safe-haven demand, the inflationary impact of rising energy prices is delaying expectations of monetary easing, creating mixed signals for gold and silver.
Monetary Policy Stance – The Fed is expected to maintain a pause, reinforcing a “wait-and-watch” approach amid sticky inflation and a softening labor market. Similar policy stances by ECB, BoE, and BoJ indicate a synchronized global pause. The key trigger for metals will be forward guidance—any dovish tilt could revive bullish momentum.
Technical Triggers
Gold briefly broke the key $5000 (~Rs.157,000) support and short-term bias remains bearish, with strong support seen around $4850 (~Rs.150,000).
Silver has also slipped below $80 (~Rs.255,000), and a renewed break below $77 (~Rs.247,000) could trigger further profit-booking, dragging prices towards $70 (~₹230,000) in the near term.
Support and Resistance
| Metal | Market | Support Level | Resistance Level |
|---|---|---|---|
| Gold | International | $4850/oz | $5250/oz |
| Gold | Domestic | ₹158,500/10 gm | ₹165,000/10 gm |
| Silver | International | $77/oz | $85/oz |
| Silver | Domestic | ₹247,000/kg | ₹268,000/kg |
Source : AUGMONT BULLION REPORT
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