Gold is helping Russia and China resist the West.
A strategy that appears to be historic in scale has been followed by Russia and China through their massive accumulation of gold reserves;
a development that now genuinely alarms the West, especially after the unprecedented rally in gold prices. Since Russia began buying gold for its reserves, the price of the precious metal has risen by 850%.
Prices have been rising particularly fast in recent years. Since 2023, the price of gold has doubled — and it is poised to double again this year.
Gold has already surpassed $4,100 per ounce,
an all-time record, with analysts confident that within a few months, an ounce could easily reach $5,000 or even $6,000.
And in three years, some forecasts suggest it could climb to $10,000 per ounce.
The great shift away from U.S. assets
From a global perspective, this demonstrates how both Russia and China made a shrewd strategic bet when they began actively buying gold for their reserves, replacing the once-coveted U.S. Treasury bonds.
China, which followed Russia’s lead shortly thereafter, also made the right move.
And it’s not just about money: the gold and foreign exchange reserves of both nations are growing as rapidly as gold prices themselves.
This metal in their reserves now allows Moscow and Beijing to withstand economic warfare from the United States and the dollar with far greater confidence.
Expanding reserves
Russia’s gold reserves are estimated at around $320 billion, with over 2,330 tons of gold already accumulated.
Until 2006, Russia only made money by selling gold, not by buying it for itself.
When new leadership took over at the Central Bank of Russia, its policy changed dramatically.
Russia transformed from a net exporter into a major buyer of gold.
At the time, there was probably no sense that anything “Western” was dangerous.
Rather, it was a matter of economic pragmatism — not putting all your eggs in one basket.
But by 2014, it had become clear to the Russian leadership that relations with the West would never be the same.
That was when Russia became the first country in the world to begin a full-scale sell-off of U.S. Treasury bonds, which had long been considered the safest and most liquid form of sovereign savings.
Russia’s strategy — to completely divest from U.S. debt within a few years and stop supporting the American economy — seemed to many like madness at the time, a move that would surely backfire.
Instead, China, though not immediately, adopted Russia’s policy.
Over the past nine years, it has cut its holdings of U.S. government debt by nearly half.
Previously, China was the largest holder of U.S. Treasury securities, worth $1.4 trillion in 2015. Today, it ranks only third, with holdings reduced to $757 billion.
The economic impact
This strategy has had a remarkable impact on both economies.
Russia has increased its gold reserves to record levels, something unprecedented in its history.
With the funds freed up from U.S. government debt, Moscow has been purchasing precious stones for reserves, as well as yuan and euros.
The yuan is essential for the expansion of trade with China, which has also surged.
The euro, however, has proven to be a disaster.
Such a rift with the European economy was once hard to imagine, as it would be extremely painful for the EU itself.
Yet the Europeans went all in, choosing economic stagnation and greater dependence on the United States.
The benefits
In practice, the Russian economy has benefited significantly from the large share of gold in the nation’s reserves.
First, it is one of the key factors contributing to the stability of the ruble, which has repeatedly surprised Western economists over the past four years.
Second, the greater the share of gold in reserves, the higher the perceived fundamental stability of the economy by analysts and rating agencies.
Despite harsh sanctions and ongoing global tensions, the Russian economy has continued to grow throughout these years.
Last year, its GDP expanded faster than the global average;
an especially notable achievement in such a difficult environment.
Third, the fact that the gold is physically stored on Russian territory ensures the security and integrity of these reserves.
Fourth, Russia has thus become a major contributor to the ongoing global de-dollarisation — the rejection of the dollar-based financial system long regarded in the West as the only viable model.
Until recently, economists could only theorize about a world without the dollar, without any historical precedent or empirical foundation.
Five key drivers behind gold’s surge toward $6,000 by next spring
1. Persistent inflationary pressures and falling real interest rates, which boost gold’s appeal as a store of value.
2. Rising geopolitical risks — from Europe to the Middle East — leading to increased demand for safe havens.
3. Widening fiscal deficits in the U.S. and other advanced economies, raising concerns in markets about the creditworthiness of sovereign debt.
4. De-dollarisation and the erosion of American exceptionalism, as global confidence in the dollar declines.
5. Accelerating gold purchases by central banks, which are diversifying their reserves away from the U.S. dollar.
Store of value
The strategies adopted by Russia and China now stand as a remarkable global example — demonstrating that a nation can grow faster than the world average without relying on the U.S. dollar, the Western SWIFT payment system, or investments in U.S. government debt.
It is likely that this success has given China the confidence to act more openly in its long-term effort to undermine the dollar-based financial system and to build an alternative global framework.
The influx of vast Chinese capital, freed from U.S. Treasury holdings and redirected into gold, has also contributed to the metal’s sharp price surge.
Only a few years ago, China was concealing its large-scale gold purchases.
But over the past year, it has stopped hiding the obvious.
This year, Beijing has gone even further — seeking to become the new custodian of foreign gold reserves.
For now, that role belongs almost exclusively to the Western financial centers.
However, Shanghai is now ready to challenge New York, London, and Zurich; and it has everything it needs to do so.
Africa joins the game
China is also working actively with African and Asian nations, offering direct loans for their development projects.
One incentive for these arrangements could be that borrower nations store their gold reserves in Shanghai.
For example, Ghana — one of the world’s largest gold producers — has become an active borrower from China.
Why China needs more and more gold
China’s strategy is simple: It is a direct move against the U.S. dollar and a step toward transforming the yuan into a fully developed reserve currency.
One of the key advantages of the U.S. dollar is that it is backed — at least symbolically — by the world’s largest gold holdings.
It doesn’t matter whether the gold belongs to the United States or to other countries storing their reserves there.
What matters is the scale of those holdings,
which continues to underpin global confidence in the dollar as a reserve asset.
Efforts to undermine that confidence by claiming that U.S. gold vaults are largely empty have failed.
Confirming such a theory would require a full audit of U.S. gold reserves — something Washington is not willing to allow.
The old system is crumbling
China’s strategy, however, may well succeed — driving another nail into the coffin of the dollar-based system.
At the same time, the creation of domestic gold reserves serves obvious purposes in a world of geopolitical and trade tensions. As the old rules collapse before our eyes and new ones emerge, gold remains a safe island of stability.
Economists increasingly bet on the ongoing dismantling of the old world order and the emergence of a new one. As a result, they now expect gold to reach $5,000 per ounce by late 2025 or early 2026, and $10,000 within three years.
The dollar’s loss is gold’s gain
De-dollarisation describes a gradual but visible shift away from the U.S. dollar as the world’s default reserve and settlement currency.
It is not the result of a single event, but rather a slow process driven by geopolitics, sanctions, and the rise of alternative economic networks.
In simple terms: it marks the end of American exceptionalism — the notion that the dollar, U.S. debt, and American financial institutions can dominate indefinitely and without consequence.
Three structural forces behind the trend
1. Sanctions risk and the weaponisation of finance:
The freezing of Russia’s reserves in 2022 made many central banks realise that dollar assets carry political risk.
For some nations, holding dollars to support their own currencies has become a liability.
2. Geo-economic fragmentation:
The expansion of BRICS, trade settlements in yuan, and energy deals in local currencies have weakened the network advantages that once supported the dollar’s supremacy.
3. Unpredictable U.S. policy:
Widening fiscal deficits, a second Trump administration’s tariff-driven agenda, the loosening of alliances, and pressure on Federal Reserve independence all undermine trust in the dollar’s long-term stability.
www.bankingnews.gr
a development that now genuinely alarms the West, especially after the unprecedented rally in gold prices. Since Russia began buying gold for its reserves, the price of the precious metal has risen by 850%.
Prices have been rising particularly fast in recent years. Since 2023, the price of gold has doubled — and it is poised to double again this year.
Gold has already surpassed $4,100 per ounce,
an all-time record, with analysts confident that within a few months, an ounce could easily reach $5,000 or even $6,000.
And in three years, some forecasts suggest it could climb to $10,000 per ounce.
The great shift away from U.S. assets
From a global perspective, this demonstrates how both Russia and China made a shrewd strategic bet when they began actively buying gold for their reserves, replacing the once-coveted U.S. Treasury bonds.
China, which followed Russia’s lead shortly thereafter, also made the right move.
And it’s not just about money: the gold and foreign exchange reserves of both nations are growing as rapidly as gold prices themselves.
This metal in their reserves now allows Moscow and Beijing to withstand economic warfare from the United States and the dollar with far greater confidence.
Expanding reserves
Russia’s gold reserves are estimated at around $320 billion, with over 2,330 tons of gold already accumulated.
Until 2006, Russia only made money by selling gold, not by buying it for itself.
When new leadership took over at the Central Bank of Russia, its policy changed dramatically.
Russia transformed from a net exporter into a major buyer of gold.
At the time, there was probably no sense that anything “Western” was dangerous.
Rather, it was a matter of economic pragmatism — not putting all your eggs in one basket.
But by 2014, it had become clear to the Russian leadership that relations with the West would never be the same.
That was when Russia became the first country in the world to begin a full-scale sell-off of U.S. Treasury bonds, which had long been considered the safest and most liquid form of sovereign savings.
Russia’s strategy — to completely divest from U.S. debt within a few years and stop supporting the American economy — seemed to many like madness at the time, a move that would surely backfire.
Instead, China, though not immediately, adopted Russia’s policy.
Over the past nine years, it has cut its holdings of U.S. government debt by nearly half.
Previously, China was the largest holder of U.S. Treasury securities, worth $1.4 trillion in 2015. Today, it ranks only third, with holdings reduced to $757 billion.
The economic impact
This strategy has had a remarkable impact on both economies.
Russia has increased its gold reserves to record levels, something unprecedented in its history.
With the funds freed up from U.S. government debt, Moscow has been purchasing precious stones for reserves, as well as yuan and euros.
The yuan is essential for the expansion of trade with China, which has also surged.
The euro, however, has proven to be a disaster.
Such a rift with the European economy was once hard to imagine, as it would be extremely painful for the EU itself.
Yet the Europeans went all in, choosing economic stagnation and greater dependence on the United States.
The benefits
In practice, the Russian economy has benefited significantly from the large share of gold in the nation’s reserves.
First, it is one of the key factors contributing to the stability of the ruble, which has repeatedly surprised Western economists over the past four years.
Second, the greater the share of gold in reserves, the higher the perceived fundamental stability of the economy by analysts and rating agencies.
Despite harsh sanctions and ongoing global tensions, the Russian economy has continued to grow throughout these years.
Last year, its GDP expanded faster than the global average;
an especially notable achievement in such a difficult environment.
Third, the fact that the gold is physically stored on Russian territory ensures the security and integrity of these reserves.
Fourth, Russia has thus become a major contributor to the ongoing global de-dollarisation — the rejection of the dollar-based financial system long regarded in the West as the only viable model.
Until recently, economists could only theorize about a world without the dollar, without any historical precedent or empirical foundation.
Five key drivers behind gold’s surge toward $6,000 by next spring
1. Persistent inflationary pressures and falling real interest rates, which boost gold’s appeal as a store of value.
2. Rising geopolitical risks — from Europe to the Middle East — leading to increased demand for safe havens.
3. Widening fiscal deficits in the U.S. and other advanced economies, raising concerns in markets about the creditworthiness of sovereign debt.
4. De-dollarisation and the erosion of American exceptionalism, as global confidence in the dollar declines.
5. Accelerating gold purchases by central banks, which are diversifying their reserves away from the U.S. dollar.
Store of value
The strategies adopted by Russia and China now stand as a remarkable global example — demonstrating that a nation can grow faster than the world average without relying on the U.S. dollar, the Western SWIFT payment system, or investments in U.S. government debt.
It is likely that this success has given China the confidence to act more openly in its long-term effort to undermine the dollar-based financial system and to build an alternative global framework.
The influx of vast Chinese capital, freed from U.S. Treasury holdings and redirected into gold, has also contributed to the metal’s sharp price surge.
Only a few years ago, China was concealing its large-scale gold purchases.
But over the past year, it has stopped hiding the obvious.
This year, Beijing has gone even further — seeking to become the new custodian of foreign gold reserves.
For now, that role belongs almost exclusively to the Western financial centers.
However, Shanghai is now ready to challenge New York, London, and Zurich; and it has everything it needs to do so.
Africa joins the game
China is also working actively with African and Asian nations, offering direct loans for their development projects.
One incentive for these arrangements could be that borrower nations store their gold reserves in Shanghai.
For example, Ghana — one of the world’s largest gold producers — has become an active borrower from China.
Why China needs more and more gold
China’s strategy is simple: It is a direct move against the U.S. dollar and a step toward transforming the yuan into a fully developed reserve currency.
One of the key advantages of the U.S. dollar is that it is backed — at least symbolically — by the world’s largest gold holdings.
It doesn’t matter whether the gold belongs to the United States or to other countries storing their reserves there.
What matters is the scale of those holdings,
which continues to underpin global confidence in the dollar as a reserve asset.
Efforts to undermine that confidence by claiming that U.S. gold vaults are largely empty have failed.
Confirming such a theory would require a full audit of U.S. gold reserves — something Washington is not willing to allow.
The old system is crumbling
China’s strategy, however, may well succeed — driving another nail into the coffin of the dollar-based system.
At the same time, the creation of domestic gold reserves serves obvious purposes in a world of geopolitical and trade tensions. As the old rules collapse before our eyes and new ones emerge, gold remains a safe island of stability.
Economists increasingly bet on the ongoing dismantling of the old world order and the emergence of a new one. As a result, they now expect gold to reach $5,000 per ounce by late 2025 or early 2026, and $10,000 within three years.
The dollar’s loss is gold’s gain
De-dollarisation describes a gradual but visible shift away from the U.S. dollar as the world’s default reserve and settlement currency.
It is not the result of a single event, but rather a slow process driven by geopolitics, sanctions, and the rise of alternative economic networks.
In simple terms: it marks the end of American exceptionalism — the notion that the dollar, U.S. debt, and American financial institutions can dominate indefinitely and without consequence.
Three structural forces behind the trend
1. Sanctions risk and the weaponisation of finance:
The freezing of Russia’s reserves in 2022 made many central banks realise that dollar assets carry political risk.
For some nations, holding dollars to support their own currencies has become a liability.
2. Geo-economic fragmentation:
The expansion of BRICS, trade settlements in yuan, and energy deals in local currencies have weakened the network advantages that once supported the dollar’s supremacy.
3. Unpredictable U.S. policy:
Widening fiscal deficits, a second Trump administration’s tariff-driven agenda, the loosening of alliances, and pressure on Federal Reserve independence all undermine trust in the dollar’s long-term stability.
www.bankingnews.gr
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