LIVE MARKETS-Gold only real challenger to US dollar – Morgan Stanley
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GOLD ONLY REAL CHALLENGER TO US DOLLAR – MORGAN STANLEY
The U.S. dollar's grip on global financial markets is gradually weakening, but there is no major fiat currency to challenge it. Instead, gold has become the primary beneficiary of the shift, according to Morgan Stanley.
Analysts at the bank led by James Lord note that gold's share of central bank reserves has surged to approximately 25% to 28%, from 14%, and for the first time since 1996, foreign central banks hold more gold than U.S. Treasuries.
The shift is being driven by multiple factors, including geopolitical uncertainty, inflation hedging strategies, and diversification efforts.
Central banks have signaled their intention to continue accumulating gold, with unreported purchases suggesting the trend may be even more pronounced than official data indicates.
Digital assets and stablecoins such as Tether have also played a role in supporting gold demand.
The dollar, meanwhile, faces a challenging outlook due to U.S. fiscal strain, trade tensions, sanctions policies, and broader geopolitical risks.
For these reasons, Morgan Stanley maintains a bearish outlook on the dollar and projects higher gold prices.
(Karen Brettell)
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