Gold as the new challenger to the US dollar: What Morgan Stanley says

VitaliksTwin · 2026-01-31T07:15:36+00:00

Morgan Stanley warns of a significant shift in the global financial system, with gold rising as a challenger to the weakening dominance of the US dollar. This trend reflects broader geopolitical changes and highlights the growing importance of gold in central bank reserves.

VitaliksTwin

2026-01-31 07:15:36

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Morgan Stanley recently highlights a significant shift in the global financial system. While the US dollar continues to dominate, its influence is gradually waning, and an unexpected competitor—gold—is establishing itself in its place. According to Odaily, this development reflects broader changes in a multipolar world where traditional financial architecture is evolving faster than ever before.

Decline of Dollar Dominance in the Global System

Morgan Stanley’s research provides concrete evidence of the weakening position of the US currency. Foreign exchange reserves of central banks show that the dollar’s share is decreasing, which is also reflected in its reduced use in corporate and government issuances in emerging markets. Although the US dollar still holds the largest share in global reserves and currently lacks a truly strong competitor, the situation is beginning to change.

Rise of Gold: From 14% to 25-28% in Central Bank Reserves

The most surprising finding from the research concerns gold, which is emerging as a real contender. The share of yellow metal in central bank reserves has increased from approximately 14 percent to currently 25 to 28 percent. And there are no signs of slowing down—this trend continues at full strength. Risk premiums and hedging activities by institutions are gradually increasing demand for gold and simultaneously pushing the dollar down.

Political and Economic Factors Behind De-dollarization

The phenomenon of de-dollarization is not only economic but also political. States and central banks are seeking to diversify their reserves and reduce dependence on the US currency. Morgan Stanley currently identifies these processes as “neutral to mildly accelerating.” Future geopolitical developments will be decisive in how quickly de-dollarization spreads. In this context, gold represents an ideal contender—universally recognized, politically neutral, and increasingly preferred by states with ambitions to diversify their reserves.

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