Morgan Stanley: The Challenge of Gold to Dollar Hegemony "Shows No End"

Odaily News Morgan Stanley stated that the role of the US dollar in the global system is being continuously and gradually eroded. However, due to the limited availability of credible alternative currencies, gold has become the most significant challenger to the dollar in an increasingly multipolar world. According to Morgan Stanley's research, the international influence of the US dollar has declined across multiple indicators, including its decreasing share in central banks' foreign exchange reserves and its reduced usage in corporate and emerging market sovereign issuances. Despite this, the US dollar still holds the largest share of global reserves, indicating that no substantial challenger has emerged at present. However, once gold is taken into account, the situation changes. The proportion of gold in assets held by central banks has risen from approximately 14% to 25%-28%, and this upward trend "shows no signs of slowing down." Risk premiums and hedging behaviors will continue to put pressure on the dollar while supporting gold demand. Furthermore, the role of policy factors in driving "de-dollarization" is currently in a state of "neutral to slightly accelerating," and the evolution of these policies in the short term will determine how far the de-dollarization trend ultimately goes. (Jin10)