Morgan Stanley: The challenge to gold's dominance over the US dollar is "unending"

Odaily Planet Daily reported that Morgan Stanley states the role of the US dollar in the global system is being gradually and continuously weakened. However, due to the limited availability of credible alternative currencies, gold has become the biggest challenger to the dollar in an increasingly multipolar world. According to Morgan Stanley’s research, the international influence of the dollar has declined in several indicators, including its share in foreign exchange reserves held by central banks and its usage in corporate and emerging market sovereign issuances. Despite this, the dollar still accounts for the largest share of global reserves, indicating that no substantial challenger has emerged yet. However, once gold is taken into account, the situation changes. The proportion of gold held by central banks has increased from about 14% to 25%–28%, and this upward trend “shows no signs of slowing.” Risk premiums and hedging behaviors will continue to exert pressure on the dollar while supporting gold demand. Additionally, policy factors currently have a “neutral to slightly accelerating” effect on the de-dollarization process, and the evolution of these policies in the short term will determine how far the de-dollarization trend ultimately goes. (Jin10)