After an 18-month bull run that took it to a record high of $3,999/ounce on Monday, October 6, investors are wondering the obvious: How long will the precious metal’s rally last?
The short answer is yes — at least as long as the same macroeconomic forces that fueled its rise remain active, Thanos Chonthrogiannis, an economist at Trust Economics, a research and advisory firm, said on Friday, October 10.
Five key drivers of gold’s rise to $6,000 next spring
- Persistent inflationary pressures and falling real interest rates, which are increasing the attractiveness of gold as a store of value.
- Geopolitical risk – from Europe to the Middle East – and increased demand for safe havens.
- Widening budget deficits in the US and other advanced economies, which are raising concerns in markets about the creditworthiness of governments.
- De-dollarisation and the end of American exceptionalism, as global confidence in the dollar erodes.
- Accelerating gold purchases by central banks, which are diversifying their reserves away from the dollar.
The dollar’s loss is gold’s gain
“Dedollarization” describes a slow but noticeable shift away from the U.S. dollar as the default global reserve and settlement currency. It was not caused by a single event, but is the gradual result of geopolitics, sanctions, and the rise of alternative financial networks.
Simply put: it is the end of American exceptionalism – the idea that the dollar, US debt and US financial institutions can dominate indefinitely without consequences.
Three structural forces behind the trend
1. Sanctions risk and the “weaponization” of the financial sector
The freezing of Russian reserves in 2022 made many central banks realize that dollar assets carry political risk. For some states, holding dollars to support their national currency has become more precarious.
2. Geoeconomic fragmentation
The expansion of the BRICS, trade in yuan and energy deals in local currencies have weakened the “network” advantages of the dollar.
3. Unpredictable policy in Washington
The widening fiscal holes, the second Trump administration with its aggressive tariff policy, the loosening of international alliances and the pressures on the Fed’s independence are undermining confidence in the dollar’s stability.
IMF data confirms the change
According to the IMF’s quarterly COFER data (Q2 2025):
- the dollar’s share of global reserves fell to 42.6% (from 60% in 2001),
- while, if gold is included at current prices, its share of total reserves is 24.3%, more than double the 11.6% in 2018.
That is, out of the approximately 12.3 trillion Of the $3 trillion in total distributed reserves, nearly $3 trillion is now in gold — a scale of diversification unprecedented in the modern era of fiat money.
Trust Economics, in a recent report, notes that:
The continued replacement of the global reserve currency, the US dollar, in central bank reserves reflects both a conscious hedge against US fiscal and political instability and a reaffirmation of monetary independence by emerging economies. It also notes that central bank purchases of gold — about 1,000 tonnes a year — are now one of the most powerful drivers of its price, absorbing almost a quarter of annual global production.
A new example in reserve management
Between 1950 and 1987, gold represented an average of 60% of global reserves — almost three times the proportion today. Although this era coincides with the Bretton Woods system and the early years after the abolition of the gold standard, the comparison raises an interesting question: What if central banks “regilded” their balance sheets?
It is estimated that to increase the share of gold to 30% of reserves — that is, to half the historical average — it would be necessary:
- 2,700 tons per year for 10 years,
- an amount equal to about 75% of the world’s annual mine production. This would be impossible without a huge price increase.
According to Trust Economics:
- At an accumulation rate of ~1,000 tons/year, gold would have to hover around $5,000/ounce in 10 years to reach 30% of reserves.
- If purchases accelerate to 2,700 tons/year, the price should exceed $6,000/ounce by 2025. So, if this scenario is confirmed, the increase could reach +25% to +50% from current levels.
The IMF’s COFER data reinforces this perspective. Although gold’s share is increasing, it still lags behind:
- the dollar,
- the euro (16%),
- and “non-traditional” currencies (yen, sterling, yuan, Canadian and Australian dollars — together ~13%).
However, even a 5 percentage point shift from dollar reserves to gold would be equivalent to $600 billion in new demand, or about 5,000 tons — almost two years of global production.
Trend Expected to Continue
Gold’s 18-month bull run is based on several macroeconomic pillars: low real interest rates, geopolitical uncertainty, fiscal overexpansion and the dollar’s declining prestige.
But the key factor now lies with central banks – they act deliberately, opaquely and politically, making them powerful but unpredictable players.
If the dedollarization trend deepens and central banks continue to exchange dollars for gold, this gold market may just be at the beginning of a bull run.
But no trend lasts forever – and history shows that it can reverse abruptly and without warning.
Five warning signs
- Rising real interest rates – if the Fed remains dovish while inflation declines, real interest rates could rise and dampen gold’s luster.
- Strengthening dollar – if US growth outpaces the rest of the world, capital flows into US assets could strengthen the dollar.
- Improving fiscal discipline or reducing geopolitical risk, limiting demand for safe havens.
- Slowing or reversing central bank gold purchases, particularly from China or emerging markets.
- Technological competition or the rise of alternative assets, such as tokenised reserves or the revival of the Bitcoin narrative as “digital gold”.
For now, the momentum remains clearly bullish. Gold has regained its monetary importance, not because investors fell in love with it, but because central banks chose it.
