GOLD IN CENTRAL BANK TERMS

 

Since 2014 Global Central Banks have net sold $400 Billion in US treasuries (reserves) and bought net 600 Billion of Gold (for their reserves.)

A) As the dollar becomes weaponized through sanctions and tarrifs it becomes increasingly undesirable as a reserve asset.  Gold holds no counterparty risk.

B) As the price of necessary commodities (oil, copper, etc) reach peak cheap values - (increasing demand must outstrip potential supply over time) it is important to hold reserves in a form that holds its value historically over time against these necessary commodities.  Treasury bonds do not.  Gold has done so.

Russia says that 90 percent of its trade is now conducted in the Rubel and the Yuam

China, Brazil, Argentian, India, Saudi Arabia, Indonesia have all initiated bilateral trade agreements in their own currencies.  

20 percent of the world's oil was sold in non dollars currencies last year, whereas over the last century the petro-dollar had been the force behind dollar dominance.

Of course, it can be argued, this is occuring at the margins.

The dollar is still the global reserve currency.

But then, all change in value occurs initially at the margins.  

The question becomes at determining the rate of change at the margins over time.

And the rate of change in the shift to gold and away from dollars for the Rererve Banks of the World is accelerating.

I'm not sure anything else really matters in determining the change in the dollar value of gold over time.