How We Got Here This weekend, we want to highlight one of the most important charts in global finance. This chart showcases the holdings of U.S. dollars against Gold since 1970. Back in 1971, the U.S. came off the gold standard. The dollar because the official "reserve currency" in 1945 after Bretton Woods... but that dollar was backed by gold. When the U.S. could no longer back its currency with physical gold, the dollar floated... and the dollar became the primary instrument of trade... particularly in the oil markets. What followed in the 1990s was an uptick in globalizing U.S. dollar denominated debt. When nations fund themselves and trade in dollars (and settle accounts), they need physical dollars, so they had held them for a long period of time. But now, that shift from U.S. Treasuries to gold came after a huge shift in the way that nations perceived the U.S. After the U.S. weaponized the dollar and stripped Russia of her dollar reserves, other central banks looked around and worried that the U.S. could do the same to them. This chart showcases that central banks now trust gold more in an increasingly bipolar world. It also signals that gold's demand remains strong, and it has established a suitable floor for prices. As the dollar and other fiat currencies erode in value due to more easing and debt expansion, gold will continue to see its value against these currencies increase. In addition, gold's marginal demand comes from China, where the gold trade has been heavily influenced. China's gold demand is rising, and its currency is likely facing further devaluation. So... what's the narrative here? Gold remains a very strong trade in 2026. We will show you many ways to trade gold stocks, miners, and much more in the months ahead. Welcome to Research Republic at Slice.
