Gold is a global store of value, but it is measured in currencies — primarily the US dollar. For many years, gold prices remained constrained not because gold lost relevance, but because an exceptionally strong US dollar regime limited true price discovery.
Between 2011 and 2018, despite aggressive money printing, rising global debt, and repeated economic shocks, gold stayed largely range-bound in dollar terms. This was an abnormal phase caused by dollar dominance, not by weakness in gold.
Since then, the global monetary environment has changed. Dollar dominance has begun to erode, countries are gradually reducing reliance on the dollar, and central banks are steadily increasing gold reserves. As these forces strengthen, gold is once again reflecting global currency debasement and systemic risk.
At the heart of this shift is de-dollarisation. De-dollarisation does not mean the dollar disappears overnight — it simply means the world uses it less than before. A simple way to understand this is daily life: if one shop accepts only one payment app, that app remains powerful. But when people start using cash, other apps, or direct transfers, the app still exists — its control reduces.
This shift is already visible in global trade. India and Russia now settle nearly 96% of their bilateral trade in national currencies such as INR and the ruble, whereas earlier such energy trade was almost entirely dollar-denominated. Similarly, China purchases Russian oil and gas using yuan, and bilateral trade between Russia and China is increasingly settled in local currencies rather than the US dollar. In West Asia and Asia, several commodity and energy trades are being settled in non-dollar currencies through bilateral agreements. These are practical, real-world examples of the dollar being used less, not removed entirely.
As countries reduce dependence on the dollar for trade and reserves, they prefer neutral assets. Gold has no country, no politics, and cannot be printed. This is why central banks across the world are steadily increasing gold holdings. Rising demand for gold at the reserve level leads to structurally higher prices.
At the same time, gold increasingly acts as a bridge between currencies. As trade shifts towards yuan, rupees, and local currencies, gold becomes the common neutral reference that all systems trust.
What has further accelerated this move is the changing geopolitical backdrop. Rising geopolitical tensions, fragmented global trade, prolonged conflicts, currency sanctions, and uncertainty around global supply chains have weakened confidence in long-term fiscal discipline of major economies. In such an environment, gold naturally regains importance as a politically neutral, non-printable asset — leading to sharp repricing once long-standing constraints ease.
This shift is now visible in price action. Gold has broken out decisively in USD terms and has risen even more sharply in INR terms, where a structurally weaker rupee magnifies the move. This is not a speculative spike — it is a structural repricing.
Importantly, gold has not become “expensive.” Instead, currencies are steadily losing purchasing power, and gold is revealing that reality.
Conclusion
Gold does not have a fixed fair value — it adjusts as monetary regimes change. The recent breakout suggests that gold is still in the early stages of renewed price discovery. The real value of gold is not fully realised yet; it is still unfolding as currency dominance weakens.
-Sanket Daragshetti, Founder (ThePairTrader)
Disclaimer: The views expressed above are intended solely for general information and discussion of macroeconomic trends. This content does not constitute investment advice, nor does it represent a buy or sell recommendation for gold or any financial instrument.