The U.S. dollar’s share of global foreign exchange and gold reserves has fallen to approximately 46%, its lowest level in at least 26 years, according to an analysis. This represents a 15-percentage-point decline since 2017, with central banks aggressively accumulating gold and diversifying into other currencies.
The U.S. dollar continues to lose global market share, with its portion of foreign exchange and gold reserves tumbling to around 46%. This marks the currency’s lowest standing in over a quarter-century, having declined significantly since 2017. Data from the International Monetary Fund shows the dollar, excluding gold, makes up about 57% of global reserve currencies. That specific measure is the lowest recorded since 1994.
Central banks have been actively buying gold and diversifying their holdings into other currencies. The last time the US dollar fell below 50% of global reserves was in 1990-1991, a period marked by elevated inflation, a recession, and a crisis of confidence in the US economy, stated The Kobeissi Letter. This shift comes amid evolving geopolitical dynamics that are influencing asset flows.
Analyst Rashad Hajiyev suggests precious metals could soon begin a confident rally regardless of geopolitical negotiations. “At some point, which could be as early as next week, precious metals could start a confident rally despite no deal between the US and Iran,” Hajiyev mentioned. He maintains that metals will ignore previous narratives linking Middle East escalation to negative pressure on gold.
Hajiyev reiterated his view that geopolitical tensions are likely to rise, supporting gold’s momentum. “Whether the US achieves progress in negotiations with Iran or not does not change my view towards gold,” he stated. He pointed to global debt and conflict as fundamental drivers for the asset, with a long-term price target of $8,000 still in play.
