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- Gold surpasses the U.S. dollar in global reserves as central banks accelerate diversification amid inflation fears.
- Analysts warn gold’s parabolic rally shows euphoria signs, hinting at a possible correction and capital shift toward Bitcoin.
Global reserve data shows that gold has overtaken the U.S. dollar as the dominant store of value for central banks, marking a key move in the ongoing de-dollarization trend. According to recent data shared by market sources, gold now represents about 30% of global central bank reserves, rising from 24% in June.
The increase reflects both price gains and a broad diversification away from the dollar amid policy concerns and this year’s currency decline. Meanwhile, U.S. dollar reserves have dropped to 43%, down from roughly 60% in the early 2000s.
GOLD ERODES DOLLAR’S RESERVE DOMINANCE
Gold now accounts for about 30% of global central bank reserves, up from 24% in June, boosted by price gains and diversification away from the dollar. U.S. dollar reserves have slipped to 43% from 60% in the early 2000s, pressured by policy…
— *Walter Bloomberg (@DeItaone) October 17, 2025
Gold prices have reached new levels, climbing to around $4,380 per ounce and valuing the total global gold market at $30 trillion. Persistent inflation concerns and rising demand from both institutions and retail buyers have fueled the metal’s rally throughout October.
Reports indicate long queues forming outside bullion dealers worldwide, underscoring widespread investor participation.
At one point, estimates suggested that at a gold price of $5,790 per ounce, the total value of global gold holdings could equal that of dollar reserves. Analysts point to this price surge as a sign of market euphoria, with multiple experts warning that current price behavior resembles a “blow-off top.”
Market analyst Bishara described recent physical gold buying activity as a potential “macro top” indicator. Another analyst cautioned that the market’s momentum is unsustainable, citing similarities with previous parabolic cycles.
Technical analyst Michaël van de Poppe compared the current rally to the 1979–1980 bull run, when gold prices peaked before a major correction.
Euphoria Signs Raise Possibility of a Reversal
Several market observers, as highlighted in our previous post, agree that gold has entered a “euphoria phase,” with expectations that it could reach a short-term top around the October 29 Federal Open Market Committee (FOMC) meeting.
Analyst Ash Crypto projected that the market could see a local peak within two weeks as speculative buying activity intensifies.
Gold has now reached the euphoria Phase
It should make a local top within 2 weeks around 29th Oct FOMC, and then we will see a massive liquidity rotation into Bitcoin.
Trillions are coming into crypto market and we will see the BIGGEST BULL RUN EVER. pic.twitter.com/C3RtZ02M5z
— Ash Crypto (@Ashcryptoreal) October 16, 2025
Despite warnings of a near-term correction, gold’s dominance within global reserves signals a big structural shift. The metal’s sudden growth has further eroded the dollar’s long-standing share in central bank holdings, strengthening the ongoing move toward diversification in global monetary systems.
Bitcoin Awaits Capital Rotation Opportunity
While gold’s momentum remains strong, Bitcoin (BTC) has experienced an upward trend. The leading cryptocurrency recorded a gain of 112% in the past 24 hours. Analysts, however, note that this dynamic could soon change.
Van de Poppe stated that gold’s overheated market may prompt investors to rotate capital into Bitcoin, which he characterized as undervalued relative to gold. Ash Crypto echoed this view, forecasting that the current market setup could precede a major inflow into digital assets as part of the next bull cycle.
