Central Banks Trade Dollars for Gold as Reserves Overtake USD Holdings

Central banks are accelerating a shift from U.S. dollar reserves to gold, with gold holdings now surpassing dollar-denominated assets according to Sprott strategist Paul Wong. This latest development builds on ReSolve Asset Management’s May 20 assessment that gold remains in a structural bull market despite tactical trimming after spot gold reached $4,544.60/oz. Macro pressures including persistent fiscal deficits, petrodollar erosion, and Middle East geopolitical risks are cited as key drivers creating a structural price floor. Sprott recommends exposure via PHYS for physical bullion and SGDM for gold miners, reinforcing strategic demand even as near-term volatility persists.