Central banks signal shift away from the dollar, with greater focus on gold and the euro

Central banks are preparing to trim their U.S. dollar reserves and raise allocations to gold and the euro over the coming decade, Reuters reported. The move underscores a gradual pivot away from the dollar's long-standing role as the world's dominant reserve currency. The shift comes as the dollar's share of global reserves continues to erode while central banks build bullion positions. Central bank gold holdings have already overtaken U.S. Treasuries in value. By 2025, the dollar accounted for 57.8% of global reserves, its lowest level since 1994, as gold allocations climbed to fresh highs. Market implications Investors appear to read the strategy as supportive for gold, with pricing and forecasts pointing to potential upside in the metal. A larger role for the euro signals broader diversification in reserve management and could reshape how official institutions deploy foreign-exchange reserves. Markets also treat a sustained reduction in dollar holdings as a structural development with implications for global reserve-currency dynamics. What to watch Traders and analysts are expected to track reserve-management decisions closely, particularly from central banks in China, India and Turkey. Disclosures of sizable gold purchases or notable portfolio changes could sway sentiment and price action. The U.S. economic outlook and Federal Reserve policy decisions may also influence the dollar's appeal as a reserve asset. Commentary and research from major financial institutions, including J.P. Morgan and Goldman Sachs, will be watched for signals on the broader impact of the shift.