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Gold, ‘Non-traditional reserve currencies’ eat into U.S. dollar’s reserve dominance: Wolf Richter

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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.”

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De Beers Suspends Production At Venetia Mine Amid Global Diamond Market Slowdown

The Decision Comes As The Natural Diamond Industry Continues To Face Significant Headwinds, Including Declining Consumer Demand, Competition From LGDs

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Global diamond producer De Beers has announced a temporary two-year suspension of production at its flagship Venetia Mine in South Africa, citing prolonged weakness in global diamond demand and the need to optimize operations.

The Venetia Mine, which contributes more than 40% of South Africa’s diamond production and supports a workforce of over 4,000 employees, will undergo infrastructure upgrades during the suspension period. The company said the pause will enable it to enhance operational efficiency and expand production capacity, positioning the mine for a stronger restart when market conditions improve.

The decision comes as the natural diamond industry continues to face significant headwinds, including declining consumer demand, particularly in China, and intensifying competition from lower-priced lab-grown diamonds. These market dynamics have weighed heavily on diamond prices and profitability across the sector.

De Beers stated that the temporary closure forms part of a broader strategy to reduce costs, streamline operations, and strengthen long-term competitiveness in a challenging business environment.

The announcement also highlights broader concerns for South Africa’s mining industry, a key contributor to the country’s economy and employment. Industry observers note that mining unions have previously expressed concerns over potential job losses as companies adjust to changing market conditions.

Despite the current market challenges, De Beers reaffirmed its long-term commitment to the natural diamond industry, emphasizing that the infrastructure investments at Venetia are intended to ensure the mine is well-positioned to resume production efficiently when global demand recovers.

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