De-Dollarization Reality: Gold Overtakes Treasuries in Central Bank Reserves

The structural dominance of the US Dollar (USD) is facing its most severe test in decades, according to a new analysis by Morgan Stanley. The investment bank warns that US foreign policy—specifically the use of tariffs, sanctions, and “national security” claims to pressure allies—is driving a global pivot toward a “multipolar” monetary order.

Gold Resurges as a Strategic Asset

The most significant data point in this shift is the valuation crossover in global reserves. For the first time since 1996, the value of Gold (XAU) held by foreign central banks (approx. $4 trillion) has surpassed their holdings of US Treasuries ($3.9 trillion).

• Central Bank demand: Nations like Poland are aggressively increasing gold reserves (targeting 700 tons) to insulate their economies from financial shocks.
• The “Trump Factor”: The Presidents recent threat to acquire Greenland and impose tariffs on “uncooperative” nations has reinforced the narrative that the Dollar is a political tool, incentivizing diversification.

Analysis: USD vs. XAU

While Morgan Stanley notes there is no single currency ready to replace the Greenback, the “challenger” is not the Euro or Yuan, but Gold.

The metal has rallied nearly 100% in 18 months, driven by legitimate safe-haven demand rather than speculation. If the US continues to leverage the Dollar for political outcomes (such as seizing oil revenues in Venezuela or pressuring NATO members), the structural bid for XAU/USD is likely to persist, creating a floor for prices even if the Federal Reserve delays rate cuts.