Dollar’s dominance is losing momentum with recent geopolitical events. De-dollarisation is a secular process and is likely to benefit Gold, economists at Société Générale report.

Central banks diversifying into Gold

“Ahead of the next US general elections, the risks are growing that the US will stay tough, and with a war backdrop, this should mean a continuation of geopolitical tensions.”

“The longer the Russia-Ukraine conflict endures, the faster countries not aligned with the west will be willing to isolate themselves from the USD. This will encourage central banks to continue their strong Gold purchases.”

“The central banks of non-aligned countries should continue to de-dollarise their portfolios and keep buying Gold (6% of our allocation, unchanged) which, at a later stage, will be backed by lower real yields.