Since Richard Nixon’s decision in 1971 to break with the gold standard, the US dollar has served as the world’s reserve currency. Prior to that, international trade was settled in gold or gold-backed currencies. Over the last two years, that historical norm appears to be silently reasserting itself, as gold has begun climbing a parabolic curve in value against all major currencies.
The trend was visible well before President Trump’s “Liberation Day” tariffs prompted market panic and a flight from the US dollar and dollar-designated assets. Ever since mid-2024, gold has been on a rampage, hitting 40 all-time highs throughout that year. It reached another all-time high in April 2025 amid the fallout from Trump’s trade policies, and has risen 30 percent so far this year.
It is for the most part not retail investors but central banks that are driving the price of gold upward. For decades following Nixon’s dissolution of Bretton Woods, central banks were unloading their gold holdings, but they changed course starting after the financial crisis of 2008, led by China and Russia. Many believe dollar hegemony is virtually untouchable thanks to largely unmatched US military, institutional, and cultural might. But gold prices are making clear that confidence in the US dollar is waning and nations are preparing for a new paradigm, the details of which remain unclear.