How Currencies Have Performed So Far in 2025
As of 2025, global currencies have moved in different directions, and the performance chart shows some surprising trends. One of the most notable points is that the US Dollar Index has been the worst-performing among major currencies this year. It has weakened significantly. India’s currency, the Rupee, stands somewhere in the middle—not strong, not too weak. The Japanese Yen has also shown signs of weakness. However, one asset stands out far ahead of others—gold.
Gold Is Acting Like a Currency Now
Gold has clearly separated itself from all other currencies. While most currencies have shown weakness or moderate performance, gold has performed well and moved ahead of all. This is a strong sign that gold is now acting like a transition currency. The global trade system, which was earlier heavily dependent on the US dollar, is slowly moving towards a multi-currency structure. And in this shift, gold is emerging as the bridge until a strong alternative to the dollar is found.
No Currency Ready to Replace the Dollar Yet
If we look at other currencies like the Chinese Yuan, the Mexican Peso, or the Swiss Franc, none have shown strong enough performance to challenge the US dollar. There is no obvious replacement yet. As a result, gold is becoming a safe middle path. Central banks are increasing their gold allocations as they try to reduce over-dependence on the US dollar. It’s a silent shift, but an important one.
Central Banks Are Reducing Dollar Exposure
This change is visible in the actions of large economies. China, which earlier held around $1.3 trillion in US bonds, now holds only about $900 billion. Japan has also reduced its holdings to below $1 trillion. These countries are slowly lowering their exposure to the dollar and rotating some of it into gold. Until a strong replacement for the dollar appears, gold will likely continue to be the fallback option.
A Long-Term Global Transition Has Begun
This transition is not short-term. It may continue for the next 20 to 25 years. Gold is likely to play an important role in the global monetary system during this time. As this shift continues, holding just 2–3% of gold in a portfolio may not be enough. A good and meaningful allocation can help protect wealth during uncertain times.
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