Gold on fire as investors ditch fiat currencies

With gold showing strength on Monday, data indicates that investors are increasingly ditching fiat currencies in favor of the precious metal as their preferred reserve asset.

Specifically, the share of global gold reserves has climbed to 23% in the second quarter of 2025, marking the highest level in 30 years, according to data shared by financial market commentary platform The Kobeissi Letter on June 9.

Gold’s share has doubled over the past six years, signaling a significant shift in the metal’s role relative to fiat currencies.

Meanwhile, the U.S. dollar’s dominance in international reserves has dropped by 10 percentage points to 44%, its lowest level since 1993. This decline reflects mounting skepticism toward traditional fiat currencies.

Similarly, the Euro’s share slipped by two percentage points to 16%, the lowest in 22 years, further highlighting the broader trend.

These shifts suggest that gold is rapidly positioning itself as a preferred reserve asset, gradually replacing fiat in global portfolios. 

Gold’s hot 2025 run

In fact, gold has been one of the best-performing assets of 2025, with investors turning to it as a safe haven amid recession fears sparked by trade tensions under President Donald Trump.

As of press time, gold was gaining strength after closing the previous week in the red. The metal is trading at $3,336, up 0.8%, and has rallied over 27% year-to-date.

In the meantime, investors are monitoring the ongoing talks between the United States and China, as both sides aim to reach a trade deal following the imposition of tariffs that rattled global markets. Monday’s London talks came after a temporary pause was agreed upon, offering some relief to investors.

If the meeting results in a positive outcome, it could dampen demand for gold in the short term. However, the metal may still find support, as some analysts remain cautious. 

With several key economic indicators, including interest rates, remaining uncertain, investors are likely to continue seeking refuge in safe-haven assets like gold.

Featured image via Shutterstock