The market value of global central bank gold reserves surpasses interest-adjusted US dollar reserves for the first time

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　　Source: Global News

　　[Global News Financial Comprehensive Report] According to Bloomberg, Bloomberg macro strategist Simon White pointed out that the value of gold reserves held by global central banks has, for the first time, surpassed the scale of dollar asset reserves after valuation adjustment. This milestone event has occurred in the Bretton Woods II era and is the first time since the International Monetary Fund (IMF) began releasing relevant data in the late 1990s.

　　Previously, the market had several reports of "gold reserves surpassing dollar reserves," but at that time they cited the IMF's nominal dollar reserve figures, which were about $7.5 trillion, and included accumulated interest earnings on dollar assets. This time, the analysis uses a different approach: removing interest earnings from dollar reserves and then valuing them, resulting in a figure of about $4 trillion, just over half the nominal amount. By this measure, the value of gold reserves has surpassed dollar reserves for the first time, marking another significant turning point in the dominant position of the dollar.

　　This adjusted number better reflects central banks' "actual demand" for dollar assets. Data shows that since official dollar reserves peaked in 2014, the value of adjusted dollar reserves has declined by about 15% cumulatively; meanwhile, the global central banks' physical gold holdings (mainly emerging market central banks, measured in tons) have increased by about 15% over the same period. Simon White believes that the real demand by central banks for dollar assets is declining substantively.

　　Data indicates that the share of global trade settled in US dollars has dropped to about 40% in recent years, and cross-border loans denominated in US dollars now account for just 60% of the global total. Simon White noted that the decline of the dollar will not be a sudden collapse at some dramatic moment, but rather a slow erosion through a series of milestones—much like when the British pound lost its reserve currency status. (Chen Shiyi)

Editor: Zhu Henan