How Major Currencies Have Moved in 2025
In 2025 so far, many of the world’s major currencies have shown interesting movements. The US Dollar Index, represented by the dark green line, has been the worst-performing currency this year. Indian Rupee is somewhere in the middle of the list, neither doing very badly nor very well. The Japanese Yen is also weak. But among all this, one asset stands out clearly—and that is gold. Gold is performing much better than most currencies and is showing a very different trend.
Gold’s Role as a Transition Currency
Earlier, almost all global trade was heavily dependent on the US dollar. The US dollar is still the world’s main reserve currency today. But slowly, a change is happening. We are moving towards a multi-currency world where no single currency dominates everything. Although there is no strong replacement yet for the dollar—currencies like the Chinese Yuan or Swiss Franc are still not strong enough—gold is stepping into this important role of being a safe and trusted asset during this transition.
No Clear Replacement for the Dollar Yet
When we look at other major currencies like the Chinese Yuan, the Mexican Peso, the Japanese Yen, and the Swiss Franc, none of them have shown the strength needed to replace the dollar. There is no standout new leader. In such times, central banks around the world prefer to increase their gold reserves instead of over-relying on any single currency. This shift is happening quietly but surely, and gold is emerging as the silent anchor.
Central Banks Are Moving Away from the Dollar
We can already see signs of this change. China has reduced its holdings of US bonds from $1.3 trillion to around $900 billion. Japan too has reduced its US bond holdings to below $1 trillion. Central banks are steadily lowering their dependence on US assets and are reallocating into gold. Since no other currency is fully ready to take over, gold is becoming the natural choice for maintaining reserve security.
A Long-Term Transformation Has Begun
This is not a small trend that will end in a few months or a couple of years. It could continue for the next 20–25 years. As gold’s role in the global monetary system becomes bigger, having a good allocation to gold in personal portfolios also becomes very important. Just holding 2–3% gold may not be enough. A strong and meaningful allocation to gold can help protect portfolios during this major transition.
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